EPEM LTD v Huggins

Where a respondent’s accepted response is struck out under an unless order, the procedural rules should be construed purposively. The respondent is ordinarily subject to the bar on further participation in rule 9, but may seek reconsideration of the strike-out under rule 10 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004.

The tribunal’s discretion requires a proportionate assessment of all relevant circumstances, including the reason for default, prejudice, the effect of any adjournment and the overriding objective. Excluding a respondent from liability may be justified, while limited participation on remedy may nevertheless be required where it can occur without material prejudice or delay.

The claimant, a receptionist, resigned and alleged constructive unfair dismissal. The employer’s ET3 was struck out after it failed to comply with an unless order requiring a typed version of part of its response.

At the final hearing the Employment Tribunal refused to allow the employer’s solicitor to participate on either liability or remedy. It found unfair dismissal and awarded compensation. It later refused an application for review or an extension of time.

The employer appealed. The central issues were whether the application should have been addressed under rule 10 rather than rules 34 and 35, whether rule 9 debarred participation after an accepted response was struck out, and whether remedy-only participation should have been allowed.

1. Appeal allowed in part. The refusal to reopen the merits of liability was justified. The question whether the employer should be allowed to participate in the remedy hearing was remitted to a differently constituted Employment Tribunal.

2. An unless order is not penal, but it must have an effective sanction. Adopting the purposive approach in North Tyneside Primary Care Trust v Aynsley and Ors [2009] ICR 1333, the Tribunal held that a respondent whose accepted response has been struck out should ordinarily be treated as caught by rule 9. Otherwise, striking out the response would have no effective consequence.

3. The strike-out of a response was an order, rather than a final judgment, and the appropriate route to seek reconsideration was rule 10 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, not review under rules 34 and 35. The procedural route was not determinative because the discretion under either route required materially the same evaluative approach.

4. That approach required consideration of all relevant circumstances, including the reasons for and nature of the default, whether it was contumelious, prejudice to both parties, proportionality, the impact of an adjournment and appropriate latitude for a litigant in person. The Employment Tribunal had not addressed all relevant matters, including that the claimant was aware of the employer’s case.

5. Following D & H Travel Ltd v Foster [2006] ICR 1537, a proportionate sanction may prevent participation on liability while allowing limited participation on remedy. The employer’s requested cross-examination could have been confined to remedy, including contribution and any Polkey reduction, without reopening liability. The Employment Tribunal should have given that possibility very careful consideration.

• Employment Appeal Tribunal: Allowed the employer’s appeal in part and remitted the remedy-participation issue to a differently constituted Employment Tribunal.
• Employment Tribunal, Ashford: On 25 May 2011, refused to permit the employer to participate and upheld the claimant’s unfair-dismissal claim with compensation. On 26 May 2011, it refused review and an extension of time.