Office Equipment Systems Ltd v Hughes

When a respondent is debarred from defending liability in employment tribunal proceedings, there is no automatic right to participate in remedy. The tribunal must apply proportionality and the overriding objective. For small liquidated claims it may determine liability and remedy at one hearing without providing another hearing, although timely written submissions on remedy should generally be considered. Where the claim is substantial or complex and remedy requires separate assessment, exclusion from an oral remedy hearing is exceptional; refusal of written representations should be rarer still. The proper course is ordinarily to invite written submissions and then decide whether an oral hearing is needed. A default determination of liability leaves remedy issues open except where inconsistent with liability. Costs remain discretionary, but an application to limit appeal costs must be made as soon as practicable.

The company failed to file an ET3 in time. The employment tribunal refused an extension, entered judgment on liability under Rule 21, and later declined to permit the company to participate in the remedy process, including by written representations. The Employment Appeal Tribunal allowed the liability appeal and remitted the extension issue, but dismissed the appeal against exclusion from the remedy stage. The remitted extension application ultimately failed, leaving liability final and conclusive. The company appealed on the broader question whether Rule 21(2) permitted or required an opportunity to make submissions on remedy and whether the absence of an oral hearing justified exclusion. The appeal also raised costs under CPR 52.19.

Lord Justice Bean delivered the judgment, with Lord Justice Underhill agreeing.

1. Appeal allowed. The draft remedy decision was set aside and the issue of remedy was remitted to Employment Judge Beard, or another judge nominated by the Regional Employment Judge.
2. The liability judgment was final as between the parties. On assessment of damages, however, all issues remained open to the defaulting respondent except those inconsistent with the liability determination, whether liability had been established after a full hearing or by default. The principle stated in Lunnun v Singh [1999] CPLR 587 applied equally in employment tribunals.
3. There was no absolute rule that a respondent debarred on liability must always participate in remedy. In small claims for liquidated sums, including claims under Part 2 of the Employment Rights Act 1996, the tribunal could determine liability and remedy at the scheduled hearing without providing a further hearing. Nevertheless, timely written remedy submissions should generally be considered.
4. Where a claim was sufficiently substantial or complex to require a separate remedy assessment, only an exceptional case justified excluding the respondent from an oral hearing. It was rarer still for written representations to be refused. The approach in D & H Travel Ltd v Foster [2006] ICR 1537 was adopted. This was not an exceptional case: the draft award approached £75,000 and might have exceeded £100,000 after tax grossing-up. The proper course was to invite written submissions by a specified date and then decide whether an oral hearing was required.
5. The application to limit recoverable appeal costs was unavailable under CPR 52.19 because it was not made as soon as practicable, as confirmed by JJ Food Services Ltd v Zulhayir [2013] EWCA Civ 1304 and Kuznetsov v Royal Bank of Scotland plc. The court nevertheless retained a wide costs discretion. It ordered payment of £12,500 plus the £1,727 court fee, with enforcement stayed until remedy had been assessed.

• Court of Appeal (Civil Division) allowed the appeal, set aside the draft remedy decision and remitted remedy for reconsideration: [2018] EWCA Civ 1842.
• Employment Appeal Tribunal allowed the liability appeal and remitted the extension-of-time issue, but dismissed the appeal against exclusion from the remedy stage. The subsequent appeal against the remitted refusal was withdrawn and formally dismissed.
• Employment Tribunal rejected the late response and extension application, entered judgment on liability, and prepared a draft remedy decision without permitting the company to make remedy representations.