BAE Systems (Operations) Ltd v Paterson

An Employment Tribunal may raise a legally relevant issue which the parties have not advanced, but it must determine the issues before it fairly. Where the new issue may require further factual evidence, a party must have a proper opportunity to consider it and, if appropriate, to call that evidence. An opportunity for legal submissions alone is insufficient where factual characterisation is material.

The breadth of the preliminary-hearing power in the Employment Tribunals (Constitution Rules of Procedure) Rules does not displace this requirement. Failure to afford the opportunity is a material procedural irregularity and requires the decision to be set aside.

The claimant had transferred from Thales to BAE in June 2010 and was then dismissed. At a preliminary hearing, the parties addressed whether the TUPE Regulations 2006 applied to events in June 2010.

After the evidence and submissions, the Employment Judge raised whether service provision changes had instead occurred in April 2011. The Judge held that two such changes had occurred on 1 April 2011. BAE appealed, principally alleging procedural unfairness because it had not been allowed to obtain and call evidence relevant to the newly raised issue.

1. Appeal allowed. The Tribunal's decision was set aside because its determination of service provision changes in April 2011 followed a material procedural irregularity.

2. A Tribunal should ordinarily determine the issues the parties have placed before it. It may nevertheless raise a relevant issue which the parties have not identified. The wide preliminary-hearing jurisdiction under rule 18, particularly rule 18(2), did not prevent the Employment Judge from raising the April 2011 issue.

3. Once a new issue is raised, the Tribunal must consider its consequences. If all material facts have already been determined, a proper opportunity for legal argument may suffice. If the issue may require further factual evidence, however, the affected party must be allowed to consider the point and, if appropriate, call evidence to meet it.

4. Whether and when there was a service provision change required characterisation of facts. The evidence had been directed to June 2010, while BAE had identified a need for evidence concerning the period to April 2011. It was not afforded an opportunity to lead that evidence. Legal submissions alone did not cure the unfairness.

5. The EAT did not determine the substantive TUPE Regulations 2006 issues. The claimant was given 42 days to consider amendment. The matter was remitted for a further preliminary hearing before a differently constituted three-member Tribunal, with a different Employment Judge.

• Employment Appeal Tribunal: appeal allowed; the preliminary-hearing decision of Employment Judge Watt, whose reasons were given on 20 October 2011, was set aside and remitted for rehearing before a different Employment Judge and lay members.
• Employment Tribunal: held that two service provision changes had occurred on 1 April 2011.