Ince Gordon Dadds llp v Tunstall

A statutory moratorium preventing proceedings against a company in administration does not automatically require proceedings against co-respondents to remain stayed. Claims against employees, agents or transferees may be stand-alone claims and their continuation is a matter of case-management discretion, not jurisdiction.

Potential vicarious liability, cause of action estoppel and issue estoppel are relevant discretionary considerations. The tribunal must also assess fairness, disclosure, privilege and reputational prejudice. It may proceed where the evidence does not establish actual or overwhelming prejudice, while retaining power to revisit the stay and make disclosure or information orders.

The claimant brought employment claims against eight respondents, including two entities which subsequently entered administration, individual employees or agents, and an alleged transferee under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

The Employment Tribunal maintained the statutory stay against the entities in administration but lifted it for the other respondents. It held that the claims against those respondents were capable of standing alone and that disclosure and privilege concerns could be addressed through case management. Several respondents appealed, arguing that the moratorium applied to the whole proceedings and that continuation would cause substantial prejudice.

1. The appeals were dismissed. The Employment Tribunal had no power to lift the stay affecting the entities in administration. That could occur only with the administrators’ consent or permission from the Companies Court. Its decision concerned only the claims against the other respondents.

2. Claims against individual employees or agents under section 110 of the Equality Act 2010, and claims against an alleged transferee under regulations 4 and 7 of TUPE, were stand-alone causes of action. The claimant was not required to sue the employer or principal in order to pursue the individual respondents. Accordingly, paragraph 43(6) of Schedule B1 to the Insolvency Act 1986 did not impose an automatic stay and the issue was one of case-management discretion.

3. The potential vicarious liability of the entities in administration, and the possible operation of cause of action estoppel or issue estoppel, were relevant matters. The Tribunal had taken them into account. The administrators also had a real choice under paragraph 43(6)(a), since they could consent to the continuation of proceedings if that was consistent with the proper conduct of the administration.

4. The Tribunal was entitled to weigh the competing prejudice. It properly considered reputational risks, the respondents’ reduced access to documents and possible privilege issues. The use of the phrase overwhelming prejudice was unhelpful, but the Tribunal had not abandoned the overriding objective or the requirement of a fair and just trial.

5. The Tribunal was entitled to avoid deciding disclosure and privilege issues on assumptions. Rule 31 of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 permitted orders against any person, potentially including the administrators. The Tribunal could revisit the stay if evidence of actual prejudice emerged.

• Employment Tribunal: The Tribunal maintained the stay against the respondents in administration but lifted it for the remaining respondents.
• Employment Appeal Tribunal: The appeals were dismissed. The Tribunal’s decision was upheld as a permissible exercise of case-management discretion.