EMPLOYMENT CASE UPDATE - Relief from sanction and Unless Orders in Employment Tribunals

The legal facts

In the recent case of Chumbu v The Disabilities Trust [2024] EAT 113, the claimant brought claims against his former employer relating to unfair dismissal, whistleblowing detriment, discrimination, and money claims.

• The ET proceedings were protracted, with multiple preliminary hearings and adjournments, including one where the claimant's witness statement was inadequate, leading to postponement of the final hearing.

• The claimant, who suffered from prostate cancer and related side effects, provided medical evidence explaining his difficulties in complying but did not fully comply with the order.

• On 21 June 2021, the ET made a costs order of £1,875 against the claimant and a deposit order requiring payment of £30 as a condition of pursuing certain claims.

• On 13 December 2021, the ET made an "unless order" requiring the claimant to serve a witness statement and pay the earlier costs award by 30 December 2021, failing which his claim would be dismissed.
  

• The claimant’s ET claims were dismissed upon his failure to comply with the unless order.

• On application by the claimant the ET refused to set aside the unless order and grant the claimant relief from sanction.

The Appeal ruling

Dismissing the appeal.

(1) In relation to the witness statement, the ET had not erred in declining to set aside the unless order in circumstances in which there had been a history of non-compliance with orders by the claimant, including an earlier failure to provide a witness statement in accordance with the ET’s directions, which had led to the adjournment of the initial listing of the full merits hearing.

(2) It was clear that the ET did not accept the claimant’s explanation for his further non-compliance with the unless order regarding the witness statement, and had found that he had consciously chosen not to start the preparation of his witness statement in good time and, subsequent to the order, had then made the further choice to use his energies in drafting a detailed response to that order rather than focusing on compliance with it.

(3) The ET decisions were not found to be perverse conclusions (see explanation below for grounds of appeal), and the ET’s reasoning demonstrated that it had the interests of justice in mind, albeit that it had not expressly set out that test.

(4) The ET had, however, erred in making the earlier costs award the subject of an unless order. That had had the effect of turning the costs award into a form of deposit order, absent the safeguards provided by rule 39 ET Rules. It was, further, inapt in this case, given that deposit orders had previously been made for far lesser sums, and with a longer period for compliance; the effect of this aspect of the unless order was to place a condition on the claimant’s access to justice in respect of claims that had either been considered to have reasonable prospects of success or in respect of which he had already paid a deposit under rule 39. Moreover, given that the claimant had identified material changes to his circumstances since the costs award had been made, it was no answer to say (as the ET had) that his means had previously been taken into account.

(5) The ET’s decision in respect of the claimant’s non-compliance with the costs award aspect of the unless order demonstrated a failure to consider the interests of justice and was properly to be described as perverse. Although the ET had thus erred in its consideration of the costs award, that did not impact upon its reasoning and conclusion in respect of the witness statement; its decision in that regard revealed no error of law and meant that the refusal to grant relief from sanction was to be upheld.

The legal terminology

"Perversity" - In the context of appealing an employment tribunal judgment, "perversity" refers to a situation where the tribunal's decision is so unreasonable that no reasonable tribunal, properly directing itself on the law and evidence, could have reached it. This is a very high threshold to meet, making perversity appeals particularly challenging to succeed. The concept of perversity in appeals is strictly defined and requires a clear demonstration that the tribunal's decision was not just unfavourable but fundamentally flawed in its reasoning or disregard for the evidence. It is insufficient for an appeal to argue that a different tribunal might have reached a different conclusion or that the tribunal simply disagreed with the appellant's interpretation of the evidence

"Rule 39" - Rule 39 in the context of employment tribunals primarily deals with the striking out of claims or parts of claims due to non-compliance with certain requirements, such as the failure to pay a deposit. Under rule 39, if specific allegations or arguments in a claim are struck out, the claimant is no longer entitled to advance those allegations or arguments but may proceed with the remainder of the claim. This rule distinguishes between situations where the striking out constitutes a 'judgment' and when it is merely a 'case management order'.

When the entirety of a claim is struck out under rule 39 due to non-compliance, such as not paying a required deposit, this results in a judgment. This judgment can be reconsidered under the 'Reconsideration of Judgments' procedure outlined in rules 70 to 73. If a claimant wishes to apply for reconsideration of a judgment under rule 39, they must do so within 14 days of the judgment being issued.

Furthermore, rule 39 also allows for the striking out of parts of a response in a claim, which similarly does not constitute a 'judgment' but is treated as a 'case management order'. This type of order is not subject to the 'Reconsideration of Judgments' procedure but can be varied, suspended, or set aside under rule 29.

Rule 39 in employment tribunal proceedings is crucial for managing the progression of cases by allowing for the striking out of claims or responses, or parts thereof, based on non-compliance with procedural requirements. This rule plays a significant role in maintaining the efficiency and order of tribunal proceedings.

The takeaways

Compliance with Employment Tribunal orders must take priority otherwise, it can be an uphill battle to restore the damage caused which can lead to strike out of a claim or response.

Although there are the means to appeal a decision, it is not a guaranteed outcome to succeed on appeal, so stitch in time saves nine - avoid getting to the stage where all that is left is to appeal.

The grounds for appealing an employment tribunal judgment include perversity, new points of law, misapplication or misunderstanding of the law, and procedural irregularities. Each of these grounds requires careful demonstration of how the tribunal's decision was flawed in terms of legal principles or procedures.

If your case has reached a stage where an appeal is the only option for your case to be heard we can help you with this. Conversely in an ideal situation it is preferable to seek assistance with procedural issues in good time, to avoid the risks of losing the right to continue your case or defence.