Coors Brewers Ltd v SP Adcock & Ors, Court of Appeal - Civil Division, January 24, 2007, [2007] ICR 983,[2007] EWCA Civ 19,[2007] IRLR 440

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Case No: A2/2006/1035

Neutral Citation Number: [2007] EWCA Civ 19

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM

Employment Appeal Tribunal

HIS HONOUR JUDGE PETER CLARK

Mr M Clancy and Mr B Warman (lay members)

Royal Courts of Justice

Strand, London, WC2A 2LL

Wednesday 24th January 2007

Before :

LORD JUSTICE CHADWICK

LORD JUSTICE WALL

and

LORD JUSTICE WILSON

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Between :

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(Transcript of the Handed Down Judgment of

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Thomas Linden QC (instructed by Berwin Leighton Paisner LLP - Solicitors) for the Appellant

Dijen Basu (instructed by Rowley Ashworth - Solicitors) for the Respondent

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JudgmentLord Justice Wall:

Introduction

1. On 3 June 2005, following a five day hearing lasting from 18 to 22 April 2005, the Employment Tribunal sitting at Leicester (Chairman Mr. C.J. Goodchild) (the Tribunal) gave its reasons for upholding claims by four named individuals (the claimants) who, as a representative sample of more than 500 other employees, had brought proceedings in the Tribunal against their employer Coors Brewers Limited (Coors) under Part II of the Employment Rights Act 1996 (ERA 1996). Part II of ERA 1996 is headed ``Protection of Wages'' and the order made by the Tribunal was a declaration that, for the year 2003 (properly payable in 2004) Coors had unlawfully deducted 4% of the claimants' gross income.

2. On 27 January 2006, Coors appealed that decision to the Employment Appeal Tribunal (the EAT) in a constitution chaired by His Honour Judge Peter Clark, with Mr. M. Clancy and Mr. B Warman as its lay members. The EAT handed down its reserved judgment on 30 March 2006. It allowed Coors' appeal and set aside the Tribunal's decision. It did not, however, dismiss the claimants' claims, but remitted them to a differently constituted Employment Tribunal for rehearing. At the same time, it allowed Coors' application for permission to appeal to this court against the decision to remit.

3. Accordingly, in this appeal Coors has two objectives. The first is that we should set aside the remission of the claims to a fresh tribunal on the ground that the Tribunal did not and does not have jurisdiction to entertain them. The second, described as ``further or in the alternative'' is that we should in any event dismiss the claims on the basis that they are without foundation and have no realistic prospect of success. I propose, accordingly, to identify the two arguments which are advanced by Mr. Thomas Linden QC for Coors as; (1) the issue of jurisdiction; and (2) the merits argument.

4. There is no cross appeal by the claimants, who do not seek to uphold the Tribunal's substantive decision in their favour in this court, although there is a respondents' notice which seeks to uphold the EAT's decision to remit on grounds additional to those identified in the EAT's judgment.

5. This unusual state of affairs is brought about by the fact that the principal ground upon which the EAT allowed Coors' appeal was that the Tribunal's reasons fell short of being what Sedley LJ in paragraph 17 of his judgment in Tran v Greenwich Vietnam Community Project [2002] EWCA Civ 553, [2002] ICR 1101 described as ``Meek compliant'' (a reference to the well-known decision of this court in Meek v Birmingham City Council [1987] IRLR 250). It is, moreover, common ground that the EAT cannot be faulted for allowing Coors' appeal on this basis, and counsel for the claimants, Mr. Dijen Basu, acknowledges both that the Tribunal's reasons are defective, and that, as a consequence, its substantive decision on the merits is vitiated and cannot stand.

6. As the EAT observed when granting Coors permission to appeal to this court, the aggregate of the claims against Coors (taking all the potential claimants into account) is substantial and amounts to some £600,000. It further stated that the claims raised important questions, firstly as to ``the overlap between Wages Act and breach of contract claims'' and secondly as to the identification of implied terms ``(i) under Clark v. Nomura [2000] IRLR 766 and (ii) by custom and practice''.

7. The issue of jurisdiction and the merits argument are, plainly, closely linked. The issue of jurisdiction depends, in essence, on the nature of the claims. It is common ground between counsel that if the claims are, in reality, deduction from wages claims within ERA 1996 Part II, they can be litigated in the Tribunal. If, on the other hand, they are claims for unquantified damages for the breach or breaches of express or implied terms in the claimants' contracts of employment, then the Tribunal does not have jurisdiction to entertain them. The essential task for this court, accordingly, is, in my judgment, to identify the true nature of the claims.

8. Before setting out the facts and addressing the issues in the appeal, however, I would like to record my appreciation for the assistance we have received from both counsel in this appeal. In what is in many ways a highly unsatisfactory case, the one point which has stood out is the integrity, ability, courtesy and realism of counsel on both sides. Each plainly had a very difficult task before the Tribunal, although both were courteously reticent about it.

9. Mr. Linden faced a Tribunal which, as it seems to me, saw little merit in Coors' defence of the claims. Mr. Basu, who came late to the case, was faced with applications which had, hitherto, been advanced in a manner with which he did not think sustainable, and a Tribunal apparently determined to find in his favour on a basis which he recognised was vulnerable to attack. Each attempted to guide the Tribunal to a sustainable conclusion, and it is the fault of neither that both failed. Each is now constrained to recognise that the Tribunal itself failed in its most basic task, namely to find the facts and apply the law to the facts as found. Each has co-operated with the other, in the best traditions of the Bar (and in the absence of a transcript of what occurred in the Tribunal) to remedy the manifest deficiencies of the Tribunal's decision by attempting to agree a note of the evidence before the Tribunal. In this latter task, they have, inevitably, failed to a certain extent, but I am nonetheless grateful to them for the attempt.

The facts: preliminary observations

10. HH Judge Clark, who is, of course, himself one of the most experienced and knowledgeable circuit judges currently adjudicating in the field of employment law (and who, moreover, has a detailed understanding of the workings of Employment Tribunals) described the Chairman of the Tribunal as ``highly experienced'' and the Tribunal's lay members as ``well versed in the realities of industrial life''. Speaking for myself, I do not doubt either of those descriptions. Equally, however, I entirely agree with the EAT when, in paragraph 4 of its judgment, it said:

As the Tribunal correctly observed at the outset of their judgment, there is little dispute as to the primary facts, the issue is as to the interpretation of what occurred. Nevertheless, careful findings as to the material facts are essential before analysing the legal issues and applying the law to the facts as found in order to arrive at a permissible conclusion.

11. Although in many respects uncontentious, the facts are, in my judgment, by no means straightforward. The normal course of an appeal from the EAT is for this court to decide whether or not the Tribunal has made an error of law, and if it has, whether or not that error has been corrected by the EAT. The focus is normally on the Tribunal's decision. In such a case, this court is usually able to take the facts as found by the Tribunal from its reasons, and the Tribunal itself is frequently described as ``the industrial jury''. Even where it is asserted that the Tribunal erred in law because the findings it made were not open to it, or were otherwise perverse, the essential bedrock of any decision made by the Tribunal lies in its findings of fact.

12. In this appeal, we are deprived of the assistance this court normally receives from the Tribunal's findings of fact. It is common ground that they are inadequate - indeed, virtually non-existent. This places this court in a difficult position, since, self-evidently, it is not a tribunal whose function is to hear oral evidence or to make findings of fact. The normal course, where, unusually, the Tribunal has made these basic errors, is to remit the application for re-hearing. That, indeed, is what Mr. Basu asserts we should do.

13. Mr. Linden, in my judgment, therefore has the difficult task to trying to persuade us (in the absence of findings of fact by the Tribunal) that the Tribunal had no jurisdiction in any event. That, it seems to me, he can only do if he can persuade us that, on any view of the facts, these are simply not claims within Part II of ERA, but are properly categorised as claims for unliquidated damages for breach of contract which must be brought, if capable of being sustained, in the county court.

14. Before attempting to explain the background and discuss the points of law involved, therefore, I think it worthwhile repeating that, in my judgment, this case is a paradigm example of the truth of the proposition that, however experienced the Chairman of the Tribunal, its essential task in every case remains the same. That task is twofold. It is, firstly, to make clear findings of primary fact; secondly, it is to apply the law to the facts as found. The Tribunal appeared to recognise this in the first paragraph of its reasons. It records sitting for 5 days and considering over 3,000 relevant documents, although we were told at the Bar that this figure was a misprint,...

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