RESPONDENT DEBARRED

NSM Music Ltd v Leefe

EAT: Burton J (President): 14 December 2005

The respondent employers failed to enter a response to the claimant's complaint of unfair dismissal within the 28-day time limit prescribed by rule 4(1) of the Employment Tribunals Rules of Procedure 2004. A substantial response faxed to the employment tribunal three or four days out of time was rejected. Judgment in default was not entered but, in accordance with rule 9, a tribunal chairman made an order that the employers could take no further part in the proceedings. The employers' application for a review was refused, and the tribunal subsequently upheld the complaint and awarded compensation of £48,962 to the claimant. The employers, who wished to appeal against the award, requested written reasons for the judgment. The request was refused by a chairman on the ground that they were not entitled to take any part in the proceedings, including requesting written reasons.

The employers appealed.

BURTON J (PRESIDENT) held:
A request for reasons simpliciter, or with a view to considering an appeal to the Employment Appeal Tribunal, by a respondent who was barred from taking part in proceedings under rule 9 of the Employment Tribunals Rules of Procedure 2004 did not come within any of the exceptions to that rule. Accordingly, the decision of the employment tribunal could not be challenged. The Employment Appeal Tribunal, however, had the power under rule 30(3)(b) of the 2004 Rules to request written reasons from the employment tribunal, and, given that it was a very substantial judgment and issues had been raised as to whether an appropriate period was taken, whether mitigation was considered and how the sums ordered were arrived at, so that it could not be said there was no possible appeal on quantum, the appropriate course was for the appeal tribunal to stay the matter and request the tribunal to give its reasons.
Per curiam. (1) The effect of applying rule 9, rather than entering a default judgment under rule 8 when there is an express power of review, is that the respondent is debarred, whatever the nature or quality of its default, from contesting both liability and remedy, including the quantum of compensation. It is to be hoped that in the future a tribunal will consider very carefully whether to go down the route of rule 9 rather than a rule 8 default judgment, bearing in mind the possible consequences, and, if the rule 9 route is adopted, will take extra care to consider the consequences to the respondent.

(2) A request for reasons which positively indicates that those reasons are required for the purpose of consideration of the making a review application under rule 35 brings such a request within the ambit of the exception in rule 9(b). Amendment of rule 9 to include within the exceptions provision for a request for reasons with a view to an appeal should be seriously considered.

(3) On the employers' application for a review of the rule 9 decision, the employment tribunal did not consider the merits. But the absence of a good reason for a response not being entered in time was not itself determinative and other matters required to be considered by a tribunal in the exercise of its discretion, including the merits of the defence set against the prejudice to the claimant and the length of the delay. Plainly a sensible course for a respondent in the employers' position would be to appeal against the order refusing to review.

(4) I am unpersuaded that the Employment Appeal Tribunal has, or ought to have, power to make it a condition of the stay of the appeal that a sum should be paid to the claimant or his solicitor, as a direction with regard to "steps to be taken . . . in relation to the proceedings" under rule 25 of the Employment Appeal Tribunal Rules 1993.

Order accordingly.

Appearances: Sean Hale (SFS Legal Ltd) for the employers; Stephen Lennard (Stefanie O'Bryan, Watlington) for the claimant.