Without-prejudice discussions

BNP Paribas v Mezzotero [2004] IRLR 508


A senior executive at a bank raised a grievance relating to the way she had been treated prior to and on her return from maternity leave. She was told to stay at home while the grievance was processed.


On being asked to return to work, she was invited to a meeting to discuss her position. At the start of the meeting, the employer said it wanted the discussions to be without prejudice. After explaining that it was not viable for her to return to her old job and that there was no available alternative, the employer suggested that it would be best for the business, and for her, if she ended her employment. If she did so, she would be paid the ‘standard redundancy package’, which in her case was almost £100,000. She subsequently brought tribunal proceedings and the employers argued that no reference could be made to anything said at the meeting since it had been without prejudice and was subject to legal privilege. The tribunal chairman held that evidence about the meeting could be adduced in support of claims of sex discrimination and victimisation. The Employment Appeal Tribunal (EAT) rejected the employer’s appeal.


The EAT said the without-prejudice rule did not apply and thus the discussions were not covered by legal privilege. For the without-prejudice rule to apply, there must be a dispute between the parties and the written or oral communications to which the rule is said to attach must be for the purpose of a genuine attempt to compromise it. The act of raising a grievance does not by itself mean that the parties to an employment relationship are necessarily in dispute.


It was unrealistic in this case to refer to the parties as expressly agreeing at the meeting to speak without prejudice given their unequal relationship, the vulnerable position of the applicant in such a meeting and the fact that the suggestion was made by the employers only after the meeting had begun. Furthermore, the tribunal chairman did not err in holding that, even if there had been a dispute, it would be an abuse of the without-prejudice rule to permit the employers, in the circumstances of this case, to prevent any reference to the fact that they had sought to terminate the applicant’s employment.


It is in the public interest that allegations of unlawful discrimination in the workplace are heard and properly determined by the tribunal. Cases of this kind are peculiarly fact-sensitive and can only properly be considered after full consideration of all the facts.


Tribunal procedure


Kwamin v Abbey National Plc and other cases [2004] IRLR 516


The EAT allowed appeals in three cases where there were delays of seven-and-a-half, 12, and 14-and-a-half months respectively in the promulgation of tribunal decisions. It is a fundamental principle of natural justice that a fair trial includes the absence of any excessive or avoidable delay by the tribunal and this is enshrined in the right to a fair trial expressly provided for in article 6 of the European Convention on Human Rights.


In normal civil proceedings, it is expected that a judgment must be delivered within three months from the end of the case. In employment tribunals, additional time must be allowed, particularly for the involvement of lay members. Three-and-a-half months should be the maximum time after the end of the case for preparation and promulgation of all but the most complicated and lengthy judgments. Beyond that, in the absence of proper explanation, there is culpable delay.


However, there is no specific period of delay that will create a presumption that the decision should be set aside. An automatic sanction of a re-hearing would be unjust since it would lead to yet further delay.


The question is whether the losing party has been deprived of a fair trial by virtue of the delay in judgment. The appellant must show that the result was unsafe as a consequence of the delay.


According to the EAT, there is a sliding scale in that, the longer the delay, the more scrutiny is required. When it is suggested that there have been errors by the tribunal by virtue of the delay, less deference will be accorded to the tribunal as the finders of fact. However, the delay may not impact so heavily on all parts of the decision and where delay affects only part of the judgment, it would be an injustice to set aside the whole of the judgment.


Stansbury v Datapulse Plc and another [2004] IRLR 466


The Court of Appeal upheld an EAT’s ruling that it was entitled to entertain an applicant’s complaint about the conduct of one of the lay members of an employment tribunal during the hearing of his unfair dismissal claim. It made this ruling even though the complaint had not been raised before the tribunal, despite the applicant being represented by counsel.


A failure to raise an objection before the tribunal itself should be considered against the test of reasonableness in all the circumstances of the case. It is always desirable that a point on the behaviour of the tribunal should be raised in the course of the hearing. But it is unrealistic not to recognise the difficulty, even for legal representatives, in raising with the tribunal a complaint about the behaviour of one of its members who, if the complaint is not upheld, may yet participate in the decision on the case.


However, the EAT was wrong to hold that its function was not to resolve factual issues relating to the complaint. Furthermore, the EAT erred in holding that, on the assumption that a member of the tribunal who rejected the applicant’s unfair dismissal claim had consumed alcohol and fallen asleep during the hearing, the hearing nevertheless was fair and complied with article 6 of the European Convention on Human Rights.


Lord Justice Peter Gibson said: ‘A hearing by a tribunal which includes a member who has been drinking alcohol to the extent that he appeared to fall asleep and not to be concentrating on the case does not give the appearance of the fair hearing to which every party is entitled.’ One would imagine that few can disagree with that view.


XXX v YYY and another [2004] IRLR 471


This case is a long-running saga in which the Court of Appeal has now ruled. It held that a tribunal did not err in finding that a video made covertly by an applicant nanny, and which depicted her employer making sexual advances to her in the presence of his child, should not be adduced in evidence because it had no probative value in the nanny’s sex discrimination claim.


This was because there was no inconsistency with the employer’s case that there was a consensual sexual relationship. According to the Court of Appeal: ‘The first and most important rule of law of evidence... is that evidence is only admissible if it indeed is relevant to an issue between the parties.’


Costs


Health Development Agency v Parish [2004] IRLR 550


The EAT held that the conduct of a party prior to proceedings or unrelated to proceedings cannot found an award of costs in an employment tribunal. A tribunal’s power to make an award pursuant to rule 14 is founded on a finding as to the way a party has brought or conducted proceedings.


Lodwick v London Borough of Southwark [2004] IRLR 551


An employment tribunal ordered an applicant to pay the respondent’s costs of £4,000 on the grounds that the hearing had been considerably extended by his conduct.


The EAT rejected an appeal, but the Court of Appeal ruled that the tribunal had been in error. For a tribunal to order costs is exceptional and the reason for, and the basis of, an order should be specified clearly, especially with a sum as substantial as £4,000.


The tribunal did not quantify the extent to which the hearing had been extended, nor could that matter be clarified by reading the decision. In the absence of such clarity, it could not be held that the tribunal’s broad discretion on costs had been correctly exercised.


McPherson v BNP Paribas (London Branch) [2004] IRLR 558


In this case, as Lord Justice Mummery put it, the amount of costs involved was ‘for a case that never had a full hearing, very large by tribunal standards, the bill presented by Paribas for detailed assessment totalling £90,747.28’.


The Court of Appeal held that the tribunal had not erred in making a costs order against the applicant pursuant to rule 14 following the withdrawal of his unfair dismissal claim three weeks before the date fixed for the hearing. In deciding whether to award costs against an applicant who has withdrawn his claim, the crucial question is not whether the withdrawal is in itself unreasonable, but whether in all the circumstances of the case, the applicant has conducted the proceedings unreasonably.


Withdrawal can lead to a saving of costs and it would be unfortunate if applicants were deterred from dropping claims by an order for costs on withdrawal.


Tribunals should not adopt a practice on costs that would deter applicants from making sensible litigation decisions. On the other hand, they should not follow a practice on costs that might incur speculative claims by allowing applicants to start cases and pursue them down to the last week or two before the hearing in the hope of receiving an offer to settle and then, failing an offer, dropping the case without any risks of a costs sanction.


The solution lies in the proper construction and application of rule 14. However, the tribunal had erred in ordering the applicant to pay the respondent’s costs of the whole proceedings. He should only be liable to pay the costs incurred by the respondent after the date of his application to the tribunal to adjourn the hearing for medical reasons.


Work-related stress


Barber v Somerset County Council [2004] IRLR 475


The House of Lords has approved the practical guidance on determining the scope of the employer’s duty to prevent occupational stress set out by the Court of Appeal in Sutherland v Hatton [2002] IRLR 263. But while that guidance ‘is a valuable contribution to the development of the law’, it certainly does not have anything approaching statutory force.


Each case must inevitably depend on its own facts. The House of Lords also said that the best statement of general principle remains that in Stokes v Guest Keen & Nettlefold (Bolts and Nuts) Ltd [1968] 1 WLR 1776 - namely, that ‘the overall test is still the conduct of the reasonable and prudent employer taking positive thought for the safety of his workers in the light of what he knows or ought to know’.


Disability


Hewett v Motorola Ltd [2004] IRLR 545


A tribunal decided that an applicant was not protected by the Disability Discrimination Act 1995, because his long-term impairment, Asperger’s Syndrome, did not have an adverse effect on his ability to ‘understand’. The EAT allowed an appeal.


Ability to understand, for the purposes of paragraph 4(1)(g) of schedule 1 to the Act, is not limited simply to an ability to understand information, knowledge or instructions. A broad approach to the concept of understanding should be taken. There was clear evidence regarding the applicant’s difficulties in understanding the more subtle aspects of human interaction and so the case was remitted to determine whether the adverse effect of the impairment was substantial.


Swift v Chief Constable of Wiltshire Constabulary [2004] IRLR 540


A civilian police worker claimed to have been bullied at work. She asked that she should not have to work alongside the alleged bullies but was rostered to overlap with them on several occasions.


She complained of disability discrimination, contending that her employers had failed to make reasonable adjustments to her shift pattern. A preliminary issue was whether she was ‘disabled’ within the statutory definition. It was conceded that she had a recognised psychiatric condition, namely, ‘moderately severe adjustment reaction with predominant symptoms of low mood and anxiety’ for a period of more than one year. A psychiatrist said that during that period there was a substantial and long-term effect on her ability to carry out normal day-to-day activities, in that her memory and concentration were affected. But those substantial adverse effects were not present later, even though she had intermittent panic attacks and although he took the view that her symptoms would return to the point of ‘impairment’ if she had to work with the alleged bullies.


She argued that she fell within the definition of someone with a ‘recurring condition’ within paragraph 2(2) of schedule 1 to the Act. A tribunal dismissed her complaint and the EAT rejected an appeal.


The question for a tribunal is whether the substantial adverse effect is likely to recur, not whether the illness is likely to recur. In this case, the tribunal was entitled to find that an occasional panic attack or consequent sleepless night did not necessarily have a substantial effect on the applicant’s ability to carry out normal day-to-day activities.


By Martin Edwards, Mace & Jones, Liverpool