Drake International Systems Ltd v Blue Arrow Ltd

The early conciliation requirement applies before relevant proceedings are instituted, to a prospective claimant and prospective respondent. It is not a continuing jurisdictional precondition to substituting a respondent in existing proceedings. The statutory reference to a matter is broad enough to encompass linked events and possible respondents. A substitution under rule 34 of the Employment Tribunal Rules 2013 is a discretionary case-management decision. The discretion must be exercised in accordance with justice, fairness, the Selkent principles and the overriding objective. It may properly be refused where the proposed respondent is unrelated or the procedure is abused, but an additional early conciliation certificate is not required merely because a connected subsidiary is substituted for a parent company.

Blue Arrow Ltd brought TUPE proceedings against Drake International Ltd, believing that the parent company or another group company had transferred the relevant employees. The parent company stated that it was not the transferor and identified four subsidiary companies as the employers. The Employment Judge substituted those subsidiaries as respondents under rule 34 of the Employment Tribunal Rules 2013.

The subsidiaries appealed, arguing that Blue Arrow had to obtain separate early conciliation certificates before they could be substituted. The central issue was whether sections 18A–18C of the Employment Tribunals Act 1996 made early conciliation a precondition to that substitution.

1. Appeal dismissed. Rule 34 of the Employment Tribunal Rules 2013 confers a discretion to add, remove or substitute parties where issues between the person and an existing party fall within the Tribunal’s jurisdiction and it is in the interests of justice to determine them.
2. Section 18A of the Employment Tribunals Act 1996 requires prescribed information to be provided to ACAS before a prospective claimant presents an application to institute relevant proceedings. Sections 18B and 18C distinguish the pre-proceedings and post-proceedings stages. Once relevant proceedings concerning the matter have been instituted, the claimant is no longer prospective in relation to that matter.
3. The word matter is deliberately broad. It may include linked events, different dates and different people. It can therefore encompass uncertainty about which company within a group is the proper respondent. The purpose of early conciliation is to provide a formal opportunity to consider settlement, rather than to impose a substantive obligation to participate in conciliation.
4. Rule 34 is not contrary to section 18A and is not ultra vires. Substitution is a case-management decision. The discretion must be exercised consistently with relevance, reason, justice and fairness, the guidance in Selkent Bus Co Ltd v Moore, and the overriding objective, including flexibility, avoidance of delay and saving expense.
5. Where the proposed respondent is entirely unrelated to the existing proceedings, or there is sustained procedural abuse, refusal may be appropriate. On the facts, the parent and subsidiaries were closely connected, the underlying matter had been referred to ACAS, and requiring a further certificate would have been an empty formality.

• Employment Appeal Tribunal: Employment Judge Bedeau’s order substituting four subsidiary companies for Drake International Ltd was upheld; the appeal was dismissed.