Appeal No.	 EAT/844/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 May 1998

Before
 THE HONOURABLE MR JUSTICE LINDSAY
MR P R A JACQUES CBE
MR B M WARMAN

W & M RUTHERFORD t/a CARMEL NURSING HOME	APPELLANTS

MRS D HENDERSON	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING - EX PARTE

Revised

	APPEARANCES

For the Appellants	MR RUTHERFORD
(The Appellant in person)	

	MR JUSTICE LINDSAY:	We have before us at a preliminary hearing the appeal of W & M Rutherford, Mr and Mrs Rutherford, from the decision of the Industrial Tribunal at Newcastle-upon-Tyne under the Chairmanship of Mr D H Mason, sitting alone. The decision was promulgated on 20th March 1997. Although this is a preliminary hearing, we think it appropriate to explain our reasons at rather greater length than is usual.

	On 13th March 1996 the complainant, the applicant Mrs Henderson, supplied her IT1. It failed in its Box 1 to describe the nature or type of her complaint but fortunately in Box 12 two clear complaints, and two only, appear. First of all Mrs Henderson claimed she was owed one week’s holiday pay, £140; secondly, she claimed that £100 had been unlawfully deducted from her wages on the grounds of it being a repayment of a loan. She denied that she had borrowed the money.

	On 4th April 1996, the respondents, Mr and Mrs Rutherford, served an IT3. As to the holiday pay claim they accepted that something may be owing, but that the figures needed to be gone into. On the £100 loan point and its deduction, they claimed that £100 had indeed been lent to Mrs Henderson and they went on to say they had little chance of recovering it from her other than by way of deduction from wages. We do not say for a moment that that would, of itself, justify a deduction that was otherwise unlawful, but that was what they were claiming.

	On 16th May 1996 Mr and Mrs Rutherford supplied to the Industrial Tribunal a calculation showing that, in their view, £56.87 remained owing as holiday money and they indicated their willingness to pay that sum. But they continued in their assertion that the £100 had been owed to them as a repayment of a loan and details were given on that day, 16th May 1996, of the payment of the alleged loan and repayments towards the loan. That was their submission at the time.

	In some manner not apparent from our papers a hearing was scheduled for 19th February 1997. Mr Rutherford tells us that, indeed, the case had been adjourned several times, often on short notice, but, at all events, a hearing was scheduled for 19th February 1997.

	On 17th February 1997 by a letter to the tribunal, Mr and Mrs Rutherford, as the employers, indicated that they would be unable to attend through pressure of work. They accepted that £56.87 was owing as holiday money and they averred that that sum had indeed been offered to Mrs Henderson. The position still was that they insisted that the £100 had been recovery of a loan.

	On 19th February 1997, at the hearing that had been foreshadowed, the Chairman, sitting alone, heard the case. The respondents did not attend as they had already indicated they could not. The Chairman decided as follows:

“2	The respondent is ordered to pay the applicant the sum of £140.00 in respect of an unlawful deduction from her wages.
3	The respondent is ordered to pay the applicant the sum of £196.87 in respect of unpaid accounted holiday pay.
4	The respondent is ordered to pay the applicant the sum of £100.00 unlawfully deducted from her wages.”

Summary reasons were given and promulgated on 20th March 1997.

	It will be remembered that the maximum claim in Mrs Henderson’s IT1 was £100 plus £140 which equals £240 and yet, of course, the decision here exceeds that by a considerable margin. Moreover, the Chairman said this at paragraph 3:

“3	In respect of the unpaid holiday pay the respondents by their letter of 17 February 1997 concede that £196.87 was owed in respect of holiday pay. ...”

In fact there had been no such concession.

	What the letter of 17th February 1997 had said on the point was this:

“Please find enclosed a copy of Mrs Henderson contract which includes holiday entitlement, three weeks for the period May ‘95 to May ‘96. When Mrs Henderson left she had accrued 1½ weeks.
One week	37.5 hrs at £3.50		£131.25
½ week	18.75 hrs at £3.50		    65.62
					 196.87 holiday pay.
As a favour to Mrs Henderson we advanced her £140 gross holiday pay by cheque on 21.12.95. Copy of cheque stub and statement inc. This appears as a salary advance on Januarys pay in order for tax and N.I. contributions to be deducted. We have calculated Mrs Henderson is due £56.97 holiday pay which we have offered her on numerous occasions via ACAS.”

So there was no concession that as at the time either of the hearing or of the letter of 17th February 1997 £196.87 was owed in respect of holiday pay because the claim that the employers were making was that £140 had been advanced towards it, leaving only £56.87. That is a second point that gives rise to some doubt as to the nature of the Chairman’s decision.

	A third is this. The Chairman dealt with the employer’s version of events, namely that £140 had been paid to Mrs Henderson on 21st December 1996 as an advance by saying that it was not holiday pay advanced to Mrs Henderson, as the employers had said, but was a bonus which accordingly left all holiday pay still owing. There had been no prior indication by Mrs Henderson in her case against the employer that she had been awarded a bonus above and beyond wages and above and beyond holiday money. It was not a form of case against the employer that the employer could reasonably have contemplated from the IT1 which Mrs Henderson had put in. Nor was the deductibility which the employers were claiming was proper said to have been denied to them by reason of there having been a bonus.

	It is desirable that parties, especially, perhaps parties who are running small businesses, should feel confident that they are able to leave issues to the Industrial Tribunal and not attend in cases of relatively small ambit such as the one that the Industrial Tribunal was dealing with here. It is, of course, desirable, too, that Industrial Tribunals should be able to have a degree of flexibility enabling them to go beyond the strict issues as emerging from what one might call ‘pleadings’ - namely the IT1 and IT3. But here, it seems to us, that it is at least arguable - and that is all we are concerned with at this stage - that, looking at the summary reasons that the Chairman’s decision here represented a conclusion which was significantly different to the only case which the IT1 had made against the employers and hence, the only case which the employer had expected to be put against them and had defended themselves against. A claim for a maximum of £240 had become an award of £240 plus £196.87. There is no reasoning at all in the summary reasons which supports the finding of £140 deducted from wages, the finding number 2. The reasoning in the summary reasons incorporates a supposed concession which was not made, and in his the reasoning the Chairman incorporates the notion that there had been £140 bonus which is a notion which the respondents had no reason to anticipate from the way the case had been put in the IT1. 

	It is at least arguable - and, again, that is all we have to decide at this stage - that the Industrial Tribunal should have adjourned the case after hearing Mrs Henderson’s evidence with a view to the respondents having put to them the fuller form of claim that it had emerged to be, giving the employer an opportunity to resist the reasoning which the Chairman by then must have had in mind.

	So far we have referred on to the summary reasons. Extended reasons were sought and were given and they were promulgated on 21st May 1997. 

	In them, at paragraph 5 the Chairman, Mr Mason, sitting alone, says this:

“5	There are three aspects to this claim. First that the applicant had not, she said, received her entitlement to accrued unpaid holiday pay on leaving her employment. Second that the respondents had deducted £140.00 from the applicant’s wages as an alleged advance of her wages. Third the deduction of the sum of £100.00 from the applicant which the respondent said was the balance of a loan made by the respondents to the applicant. ...”

That is a three-fold claim which does not describe the claim as the IT1 had put it, which was, as I mentioned, a two-fold claim - simply for £140 holiday pay and £100 deduction from wages.

	Mr and Mrs Rutherford sought a review and that was declined on 21st April 1997.

	As we have mentioned, it is plainly right that an Industrial Tribunal should have some degree of flexibility in going beyond what are often exiguous details in IT1s. It is very common for matters not canvassed in pleadings to be dealt with in Industrial Tribunals. But where, as here, one has a respondent who is absent, not contumeliously, but, as it would seem here, by reason of pressure of work, and where as here, one has a respondent apparently minded to accept parts at least of the claimants claim and a respondent not blindly opposing everything that the applicant says, it is at least arguable that for an Industrial Tribunal to depart in its decision so far as this one did from the IT1 without giving the respondent notice of a prospective departure and giving an opportunity for the respondent to meet it, is to go too far.

	It is thus, in our view, proper that part of the present Notice of Appeal should go to a full hearing. But in the Notice of Appeal there is a quite separate ground sought to be developed which could be summarised as being bias on the part of the Chairman, Mr Mason, sitting alone. 

	We see no justification for that head of appeal whatsoever. It depended upon Mr Mason having been aware that this Mr and Mrs Rutherford were a Mr and Mrs Rutherford whom he had met and whom he might have had some animus against. 

	The point has been put to Mr Mason and he says this:

“It was only when I got your letter that I made any connection between myself and the Rutherfords. ... Certainly the name Rutherford meant nothing to me at the material time.”

We have no reason whatsoever to doubt the Chairman’s assertion on those points. 

	We thus require the appellants to strike out from their Notice of Appeal the ground relating to bias (to summarise it as that) on the Chairman’s part. That ground we do not see proper to go to a full hearing. Moreover, we would hope that in the light of this fuller judgment which we have just given, the appellants, Mr and Mrs Rutherford, will be able to refine the grounds relied upon in their Notice of Appeal more to express the sort of appeal which we have indicated may be arguable. It is for them to consider whether they can improve upon the present Notice of Appeal clearly to make points that are indeed arguable.

	So what we shall do is this. We shall allow the matter to go to a full hearing. The grounds which we have summarised as bias is not be permitted to go forward and must be struck out from the Notice of Appeal. We shall give Mr and Mrs Rutherford 14 days within which to consider amendment and if thought fit to amend the Notice of Appeal more clearly to specify the sort of ground that we have been adumbrating as being arguable. On that basis the Notice of Appeal with the deletion we have described and as so further amended, if it is, is permitted to go to a full hearing.