Foster v Bon Groundwork Ltd

Issue estoppel requires that the earlier decision decided an issue that was a necessary ingredient of the earlier cause of action. A tribunal’s finding that is unnecessary to that cause of action cannot found an estoppel.

A tribunal lacks jurisdiction to determine a premature redundancy claim presented before the relevant date. Such a jurisdictional defect prevents an estoppel arising from the earlier decision.

Henderson v Henderson abuse requires a broad merits-based judgment. Mere possibility that a matter could have been raised earlier is not alone sufficient. The court must assess whether the later proceedings amount to misuse or unjust harassment.

The appellant presented an ET1 arguing he had been laid off. An earlier tribunal (the Salter judgment) refused a redundancy payment claim after a hearing held before the appellant's dismissal took effect. The appellant later issued fresh claims alleging multiple types of unfair dismissal, a guarantee payment under Part III ERA 1996, notice and holiday pay and related statutory claims. The respondent applied to strike out the fresh claims as res judicata or as an abuse of process under Henderson v Henderson. The employment judge struck out most claims but allowed the guarantee payment claim to proceed. The appellant appealed and the respondent cross-appealed on the guarantee payment point. The central issues were (1) whether issue estoppel arose from the Salter judgment; (2) whether that judgment had jurisdiction to determine reasons for dismissal; and (3) whether the second proceedings were an abuse under Henderson/Johnson.

(1) Appeal allowed. The Employment Judge erred in holding that issue estoppel prevented the unfair dismissal claims based on the alleged reasons for dismissal. The Salter judgment did not decide a matter that was a necessary ingredient of the earlier cause of action. The earlier ET1 advanced a claim under section 135(1)(b) ERA 1996 for lay-off redundancy not a dismissal-based redundancy claim. (See paras [30]–[33].)

(2) Even if the Salter judgment contained findings about the reason for dismissal, those findings could not give rise to estoppel because the Salter Tribunal lacked jurisdiction to determine a dismissal-based redundancy claim brought before the relevant date. A premature redundancy claim falls outside jurisdiction under section 164 ERA 1996 and the Watts line of authorities remains binding on that point. Accordingly the Salter findings could not found issue estoppel. (See paras [34]–[46].)

(3) The Employment Judge also erred in finding that the subsequent unfair dismissal claims were an abuse of process under Henderson v Henderson. The correct approach is the broad, merits-based test articulated in Johnson v Gore-Wood. Mere failure to raise a matter in earlier proceedings does not automatically render later proceedings abusive. There was no evidence of unjust harassment or other additional element in this case sufficient to strike out the claims. The unfair dismissal and age discrimination claims therefore proceed to a substantive hearing. (See paras [59]–[68].)

(4) Cross-appeal dismissed. The Employment Judge was entitled to conclude that the guarantee payment claim was not an abuse. The guarantee claim was distinct and its pursuit did not amount to unjust harassment. (See paras [86]–[89].)

Order: The appeal is allowed, the cross-appeal dismissed. The unfair dismissal and related age-regulation claims are remitted for substantive hearing. The guarantee payment claim remains for hearing.

• Employment Appeal Tribunal: Appeal from the Ashford Employment Tribunal (Employment Judge Seymour). Judgment allowing appeal and dismissing the respondent's cross-appeal. ([2011] UKEAT 0382_10_1703)
• Employment Tribunal (first instance): Earlier proceedings before Employment Judge Salter produced the Salter judgment refusing redundancy payment (decision delivered 10 August 2009; reasons sent 4 September 2009).