The employment tribunal had been wrong to refuse to review an order striking out the employer's response.
The appellant employer (E) appealed against a decision that it remained subject to a striking out order. E was a coach operator. The respondent (L) was appointed as E's general manager at a time when E was about to become the subject of a public inquiry with a view to the revocation of its licence. L resigned after one month complaining about various aspects of the running of E. His resignation was accepted with immediate effect. E later successfully appealed against the decision to revoke its licence. L claimed payment for his notice period and untaken leave and asserted that he had been automatically unfairly dismissed. E filed a response stating that it intended to resist the claim but did not answer in detail or engage with the case which L put forward in his claim form. An order was made requiring E to provide a full response by a specified date and stating that if E did not respond by that date the response would be struck out. E did not comply and a second order was made striking out its response. The tribunal received a letter written on E's behalf stating that it had been putting all of its efforts into having its licence restored and that L's swift resignation had thrown the administration of its business into disarray. It was submitted that a review should be granted in the interests of justice and that the detailed response required by the first order should be admitted out of time. The tribunal refused E's application to review the second order on the basis that it was misconceived in that setting aside that order would not set aside the first strike out order. It stated that E's failure to open the letter sent to it was the reason for its failure to deal with the order and that was wholly inadequate. The tribunal added that prejudice would be caused to L by allowing the review since he had already prepared witness statements and delivered them to E. E submitted that it was wrong to say that the application for a review of the second order was misconceived, that the employment judge did not deal adequately or at all with the application to review the first order and that the judge did not consider the effect which failure to comply would have on E.
HELD: The second order was irregular and misconceived and it should never have been made. The fact that the second order was a striking out order stood in the way of restoration of E's response until the order was set aside. It should have been reviewed and set aside. Any judge, conscious of the need to do justice, should have ensured that the matter was heard on the basis that an application to review the first order out of time should have been considered as an alternative. The wise course would have been to clarify that E wished to apply for its response to be reinstated, ensure that a written application was made if it was required and deal with it in accordance with established principles. The judge's reasoning did not address or balance the factors set out in CPR r.3.9(1), which was essential if the judge was considering whether it was in the interests of justice for there to be a review, and nor was it the kind of balanced approach which would be required for a consideration whether it was just and equitable to extend time. Where the application for relief was made within a short time of a party appreciating that it had been made subject to a sanction, the merits of granting an extension of time were so closely bound up with the merits of the application for relief from sanctions that it was unhelpful to consider them in isolation from each other. The judge had not put E's explanation into context or evaluated it against other relevant factors. It was relevant to consider the merits of the claim when considering whether to grant relief from a sanction and the judge had not done so. There was no equivalent to CPR r.3.9(2) in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 Sch.1 and therefore no statutory requirement that an application for review had to be supported by a witness statement. Whether a tribunal would accept what was said in a letter by way of excuse was a matter for the tribunal. The second order was set aside along with the judgment and the matter remitted to the tribunal for consideration by a different judge of the question whether the first order should be reviewed and whether time should be extended for service of the detailed response.
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