The Court of Appeal has ruled that a company ‘debarred’ from a liability trial should still be able to contest a future compensation remedy. 

Lord Justice Bean said the case was sufficiently complex that the company must have the chance to participate in a hearing before an employment judge.

In Office Equipment Systems Ltd v Hughes, the defendant in the employment tribunal claim lost liability judgment by default after failing to file its response within the required time. 

The defendant company claimed to have missed the deadline due to staff sickness, but an employment judge concluded there was no reasonable explanation for the delay and opted not to grant a time extension. 

Subsequently, the tribunal issued a judgment upholding claims for unfair dismissal, unpaid holiday pay, unpaid wages, sex discrimination and breach of contract. Two months later, the tribunal issued ‘draft findings’ in the remedy decision, as Employment Judge Beard awarded the claimant almost £75,000 in total. 

The company had already launched an appeal against the decision on liability, but now added an appeal against its exclusion from participating at the remedy hearing. The former challenge failed, and liability judgment is now conclusive, but the Court of Appeal decided that the debarring order should not extend to the remedy hearing in such a significant claim. 

Lord Justice Bean added: ’In a case which is sufficiently substantial or complex to require the separate assessment of remedy after judgment has been given on liability, only an exceptional case would justify excluding the respondent from participating in any oral hearing.’ 

The judge said there was no absolute rule that a party debarred from defending a claim should always be entitled to participate in the determination of a remedy.  But he found no reason in this case to bar the company from making submissions on quantum and said it would have been best to invite the company to make them by a specified date.

The appeal was allowed, the draft decision on remedy set aside, and the case remitted to EJ Beard.