Appeal No. UKEAT/0112/09/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 5 June 2009
Judgment handed down on 24 July 2009

Before
HIS HONOUR JUDGE PETER CLARK
SIR ALISTAIR GRAHAM KBE
MRS L TINSLEY

ENTERPRISE LIVERPOOL LTD	APPELLANT

1)	MR A JONAS
2)	MR B EDWARDS & 7 OTHERS
3)	MR J O’TOOLE & MR L GALLOP
4)	BRAMALL CONSTRUCTION LTD & OTHERS	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR DAVID READE QC
(of Counsel)
Instructed by:
Vista Employer Services Ltd
Regent House
Heaton Lane
Stockport
Cheshire SK4 1BS	
For the 1st, 3rd and 4th Respondents	MR NEIL DOWNEY
(of Counsel)
Instructed by:
Messrs John A Behn Twyford & Co Solicitors
Number 1 Moorfields
PO Box 19
Liverpool L69 2EJ
and
Messrs O H Parsons & Partners Solicitors
3rd Floor Sovereign House
212-224 Shaftesbury Avenue
London WC2H 8PR

	
Other Respondents	No appearance or representation by or on behalf of remaining Respondents	

SUMMARY
PRACTICE AND PROCEDURE:  Amendment
Amendment permitted by the Employment Tribunal to substitute correct Claimant in a case initially brought by individual employees; under TUPE reg. 15(1)(c) the claim could only be brought by the relevant recognized trade union on a complaint of breach of reg. 13.

Appeal dismissed.  Judge below had jurisdiction to consider the application and exercised his discretion permissibly, bearing in mind the balance of injustice and hardship.

HIS HONOUR JUDGE PETER CLARK

1.	This appeal concerns the power of an Employment Judge to give permission to amend a Claim Form ET1.  The case is proceeding in the Liverpool Employment Tribunal.  The claims raised in the pleadings concern relevant transfers in connection with work on Liverpool City Council housing stock.  Three transfers were involved; in each case Enterprise Liverpool Ltd (Enterprise) was the transferor.  Three groups of employees commenced proceedings in the Employment Tribunal.  The claims of Mr Jonas brought against Enterprise and Liverpool Mutual Homes, the relevant transferee, have been settled.  In the second group, Mr Edwards and others, all individual Claimants employed by Enterprise in a part of the undertaking transferred to Bramall Construction Ltd (Bramall) brought claims under regulations 13 and 14 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) against both Enterprise and Bramall.  The Particulars of complaint in those cases simply read:

“On 31st March 2008, my previous employer, Enterprise Liverpool transferred me to my new employer Bramall.
This transfer was executed without the relevant consultation and providing of information under Regulations 13 and 14 of T.U.P.E. 2006.”

2.	The third group consists of, again individual employees, Mr O’Toole and others, who contend that their employment transferred from Enterprise to Cameron Ltd (Cameron) on 31 March 2008 and again complain only of breaches of regulations 13 and 14 of TUPE in similar terms to the second group.

3.	All relevant employees were members of either Unite, the GMB or UCATT.  Those independent trade unions were recognized by Enterprise.

4.	Having commenced those proceedings in the name of individual Claimants with union assistance solicitors were then instructed to act for the Claimants.  Immediately those solicitors identified a problem.  Since there were recognized unions involved the claims under TUPE could only be brought by the relevant union (see reg. 15(1)(c)).  So the solicitors instructed by UCATT on behalf of Mr O’Toole and others (the UCATT employees) applied to the Employment Tribunal by letter dated 8 August 2008, apologizing for the error, for permission to change the name of the Claimant from the UCATT employees to UCATT itself.  A similar application was made on 21 August by solicitors instructed by Unite on behalf of Mr Edwards and others, (the Unite employees) for permission to substitute Unite for the Unite employees.  I am no longer concerned with a similar application in Mr Jonas’ case.  

5.	The relevant applications were opposed by the respective transferor, Enterprise, and transferees, Bramall and Cameron, and so a Pre-Hearing Review was held before Employment Judge Robinson on 21 November 2008.

6.	By a judgment with reasons dated 7 January 2009 that Judge permitted the amendments sought.  Against that judgment Enterprise, supported by Cameron, now appeals.  The appeal is opposed by the UCATT and Unite employees and their respective unions.  Enterprise now appear by David Reade QC;  Cameron do not appear today for reasons explained in their solicitor’s letter dated 29 May; however we have taken into account written submissions lodged on their behalf prepared by Dee Masters of counsel and finally Neil Downey of Counsel appears on behalf of all Claimant employees and their two respective unions.

Amendment
7.	Rule 10(2)(q) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 gives express power to an Employment Tribunal or Judge to give leave (now permission) to amend a claim or response.  Rule 10(2)(k) expressly envisages the joinder of respondents for the remedy claimed.  No specific additional provision is made for the substitution of claimants.

The Employment Judge’s decision
8.	Acknowledging his wide discretion under Rule 10 to make case management decisions the Employment Judge directed himself in accordance with the judgment of Underhill J in TGWU v Safeway Stores Ltd [2007] UKEAT/0092/07/LA. 6 June 2007) (surprisingly not yet reported).  There, following closure of a depot by Safeway, the recognized union commenced proceedings in the Employment Tribunal making claims of unfair dismissal on behalf of its members employed at that depot.  Then after the time for bringing a claim under s189 Trade Union and Labour Relations (Consolidation) Act 1992(TULRCA) and regulation 11 of the then TUPE Regulations 1981 (the consultation provisions) had expired they sought leave to amend to add those claims.  Permission was refused by the Employment Judge but allowed by Underhill J on appeal. 

9.	In allowing the union’s appeal Underhill J reviewed most of the authorities on amendment in this jurisdiction including, chronologically, Cocking v Sandhurst [1974] ICR 650 (NIRC Sir John Donaldson P); British Newspaper Printing Corporation (North) Ltd v Kelly [1989] IRLR 222 (CA), in which Lord Donaldson MR gave the leading judgment); Selkent v Moore [1996] ICR 836 (Mummery P); Housing Corporation v Bryant [1999] ICR 123 (CA); Harvey v Port of Tilbury (London) Ltd [1999] ICR 1030 (Lindsay P) and Ali v Office of National Statistics [2005] IRLR 201 (CA).

10.	Additionally, at paragraph  11, he referred to my judgments in Fairhurst v Northumberland County Council (UKEAT/1333/96. 19 June 1997) and Lehman Brothers Ltd v Smith (UKEAT/0486/05/TM. 13 October 2005) and that of Mr Recorder Langstaff QC in Swiss Re Life and Health Ltd v Kay (UKEAT/0680/0I. 11 July 2002), with which I expressly agreed at paragraph 38 of Lehman Brothers, and said:

“I have no doubt that it (the approach in Kelly and Selkent, followed in the 3 cases just mentioned) represents the orthodox position on the authorities.”

11.	However, at paragraph 12 Underhill J considered the one significant exception to that consistent line of authority, namely the judgment of Lindsay P in Harvey, which I declined to follow in Lehman Brothers (paragraphs 34-37).  He concluded that the proposition that in every case where the amendment application is made out of time, allowing for the relevant escape clause, it must be refused was inconsistent with Kelly and Selkent and should not be followed.  For completeness, I have been referred to the judgment of HHJ McMullen QC, apparently not cited in Safeway, in Cook v Clarke (EAT/0070/03/TM. 2 May 2003) in which this appeal tribunal chose to follow the reasoning in Harvey (see paragraph 15).

12.	In allowing the appeal in Safeway Underhill J held that the Employment Judge was wrong not to apply the relative balance of injustice (and hardship) propounded by Mummery P in Selkent (843F).  Exercising his powers under s35(1) Employment Tribunals Act 1996 he concluded that, in all the circumstances, the balance came out in favour of allowing the amendment.

13.	Based on Safeway Judge Robinson concluded that this was a case of a simple mistake by officers of the unions (in naming the wrong Claimant); that the Respondents were not prejudiced and greater injustice would be caused to the Claimants than the Respondents if the amendment ws refused.  Accordingly he permitted the amendment to substitute the appropriate union for the individual employees as Claimant in each case.

The Appeal
14.	This is now the third occasion on which I am required to consider the proper practice when considering applications to amend (see earlier Fairhurst and Lehman Brothers).  Mr Reade submits, in short, that Safeway misconstrues the principle in Selkent, endorsed by the Court of Appeal in Ali.  That Lindsay P was correct in Harvey and HHJ McMullen was right to follow that reasoning in Cook.  Here, the application to amend was made outside the primary limitation period and it is not suggested that the reasonable practicability escape clause can be invoked.  Thus the Employment Tribunal has no jurisdiction to entertain the claim under regulation 13 TUPE brought by the individual Claimants.  What is being sought by way of amendment is, to adopt the three-fold classification in Harvey on Industrial Relations, Vol 5, T311.03, a category 3 alteration, that is the substitution of a wholly new claim or cause of action which is not connected to the original claim at all.  The fact that the application to amend is out of time is fatal (see Harvey, per Lindsay P).  The amendment should be disallowed.  Ms Masters supports that approach.

15.	Having revisited the authorities I am unable to accept that submission.  The critical question is whether limitation precludes the amendment in this case.  In my opinion it does not.

16.	First, the authorities.  I do not read Selkent in the way Mr Reade invites me to do.  At p. 843F-844C Mummery P emphasized the need to take into account all the circumstances and balance the injustice and hardship of allowing the amendment against the injustice and hardship of refusing it.  Those relevant circumstances include the question of time limits where a new complaint or cause of action is proposed to be added by way of amendment.  It is not there suggested that even in a category 3 case a finding that, as a new claim, that claim would be out of time, is fatal to the application.  Nor am I persuaded that in Ali Waller LJ was saying anything different.  At paragraph 3 he found it of some interest that Mummery P contemplated that the general overriding test involved the balance of injustice and hardship and that the applicability of time limits was just one aspect of the more general test and at paragraph 40 he said:

“There will be further circumstances in which, although a new claim is technically being brought, it is so closely related to the claim already the subject of the originating application (now claim Form ET1) that justice requires the amendment to be allowed, even though it is technically out of time.”

17.	That disposes of the point made in the appeal.  However I should add that I am not convinced that this is indeed a ‘category 3’ amendment.  The claim form raises a claim under regulation 13 TUPE.  That is the claim which the substituted Claimant, the union, wishes to bring.  It is not a new claim or course of action.  As such it falls more conveniently into the first category of amendment as formulated in Harvey on Industrial Relations: it is an amendment which is merely designed to alter the basis of an existing claim (by substituting the correct claimant) without purporting to raise a new distinct head of complaint.  As Harvey correctly points out at paragraph 312, amendments falling within category 1 are not affected by time limits as the nature of the original claim remains intact.

18.	In these circumstances I do not find it necessary to enter into the debate, raised by Mr Reade, as to whether an amendment of a Form ET1 relates back to the date on which the claim was originally presented to the Employment Tribunal.  The important point is that in a category 3 amendment case the Employment Tribunal takes into account the limitation question as a relevant factor in deciding whether or not to grant permission.  Having done so, no further limitation question arises.

19.	Finally, a practical thought.  The limitation provisions are designed to protect Respondents from being faced with stale claims.  A short primary limitation period of three months is provided for in most employment protection legislation, subject to the relevant escape clause; just and equitable extensions in discrimination case; the reasonable practicability provision in nearly all other types of case, including the present (I leave aside the extension under regulation 15 of the Dispute Resolution Regulations 2004 and the Equal Pay Act 1970 provisions).

20.	In every amendment case referred to in this judgment the original claim form has been lodged in time.  Thus the respondent is on notice of a claim.  Whether, by amendment, the claimant should be permitted to alter or add to that claim is a question which requires an overall view to be taken as explained by Mummery P in Selkent.  It is not the same as a brand new claim being launched out of time.

Conclusion
21.	I would dismiss this appeal.  It seems to me that the Judge was right to direct himself in accordance with Safeway.  He applied the balance of hardship test and reached a permissible conclusion.  Even if he can be criticized for not directly addressing the question of limitation if I am correct in placing this amendment into category 1 it is irrelevant.  If on the other hand it properly falls within category 3 I would uphold the Judge’s decision on the balance of injustice.  The Respondents, as appears from their Forms ET3, knew the claim, which was being brought against them and raised the point as to the proper claimant.  They have suffered absolutely no prejudice.

22.	Finally, I have expressed my own views on the technicalities of the practice relating to amendments in the Employment Tribunal.  This is an appeal from an Employment Judge sitting alone and would normally be heard in this appeal tribunal by a Judge sitting alone.  However, s28(4) Employment Tribunals Act 1996 provides that a judge may direct that such an appeal will be heard by a full 3 member division.  That is what HHJ McMullen QC did at the paper sift stage in this case.  I respectfully agree with that exercise of discretion.  It is comforting to know that the application of the law, as I continue to believe it to be following the views which I expressed, first in Fairhurst and then Lehman Brothers, produces a result wholly endorsed by the sense of fairness of my experienced industrial colleagues.

23.	For these reasons this appeal fails and is dismissed.