Limoine v Sharma

It is not lawful to enter judgment under Rule 21(2) solely because a claim is undefended. The judge must first be satisfied, treating the claimant's unopposed statements as uncontested, that the factual elements necessary to make the claim in law are established on the material before the tribunal.

A respondent to an undefended claim who seeks to participate under Rule 21(3) must be the subject of an express judicial decision on the extent of permitted participation. The judge must consider and decide that issue, balancing prejudice and practicalities.

The claimant appealed from an Employment Tribunal decision which recorded judgment for the respondent on an employer's contract claim and dismissed the claimant's cross-claim. The ET had accepted the respondent's employer's contract claim as "accepted" and the claimant had not filed a formal response to that employer's claim within the 28 day period. Both parties nonetheless prepared for the listed hearing and attended. The ET gave judgment for the respondent at the hearing and dismissed the claimant's claim on the basis of an agreed set-off. The Appeal Tribunal considered whether the ET erred in law in entering judgment without first determining that the unopposed material established the essential facts, and whether the judge erred in failing to consider whether the claimant should be permitted to participate under Rule 21(3). The appeal was allowed and both matters were remitted for reconsideration under Rule 21(2) and, if necessary, a hearing addressing permitted participation and the claimant's original claim.

(1) Overall disposition: The appeal is allowed. The Employment Tribunal's judgment both upholding the respondent's employer's contract claim and dismissing the claimant's claim is quashed. Both matters are remitted to the ET for further consideration under Rule 21(2) and, as appropriate, rehearing. (Outcome: Judgment quashed and remitted.)

(2) Rule 21(2) — scope and required approach: A judge must not enter judgment under Rule 21(2) merely because no response has been presented. The judge must decide whether, on the available material and treating the claimant's/respondent's assertions as uncontested, a determination can properly be made. That requires satisfaction that the essential factual elements of the claim are made out on the material before the tribunal. The judge may seek further information from either party to enable that decision. If reasonable doubt remains, a hearing must be held. (See Rule 21(2) and Presidential Guidance.)

(3) Rule 21(3) — participation at hearing: Where a respondent to an undefended claim seeks to participate in a hearing, the judge must consider and decide judicially whether, and to what extent, participation should be permitted. The judge should balance prejudice and practical consequences. Participation may be permitted in limited forms, for example oral or written submissions or limited cross-examination, depending on whether the hearing concerns liability or only remedy.

(4) Interaction with Presidential Guidance and the overriding objective: The judge should have regard to Presidential Guidance when exercising Rule 21 powers. The Guidance assists on matters such as whether a claim is clearly stated, burden of proof, calculations proved, and whether further information or a hearing is required. If in doubt as to any material matter, the Guidance suggests listing a hearing.

(5) Application to the present case: The ET's Reasons indicate that judgment was granted because no timely response had been entered, without any judicial consideration of whether the respondent's material established the claim on the available papers, and without deciding whether the claimant should be permitted to participate. Those were errors of law and justify allowing the appeal. Ground 2 (substantive challenge to respondent's claim) was unnecessary to decide and is remitted for the tribunal to address on rehearing if required.

(6) Practical orders: The whole ET judgment is quashed in respect of both claims. Both matters are remitted to the ET. First, the ET must determine under Rule 21(2) whether it can properly decide the respondent's claim on paper. Second, if it does not dispose of that claim on paper, it must decide the extent to which the claimant should be permitted to participate at any hearing under Rule 21(3). Third, the claimant's defended claim must be reheard unless it has been lawfully disposed of without a hearing. No substitution of judgment is made by the EAT.

• Employment Appeal Tribunal Appeal allowed; ET judgment quashed and remitted to the Employment Tribunal for reconsideration under Rule 21(2) and for further procedure as directed by the EAT.
• Employment Tribunal Original decision (Employment Judge Wright, Southampton) upheld respondent's employer's contract claim and dismissed claimant's claim; decision quashed and remitted by the EAT.