Tesco Plc & Anor v Bush & Anor

An appellate challenge to an employment tribunal’s discretionary case-management order succeeds only where the decision falls outside the generous ambit of reasonable disagreement. Where related claims have materially overlapping evidence and issues, separate hearings may create a real risk of inconsistent findings, actual unfairness, or the appearance of unfairness. That risk may require a combined hearing.

A split liability and remedy hearing remains fact-sensitive. The tribunal should state which remedy issues will be determined at the liability stage. It may, where proportionate case management so requires, defer Polkey and contributory-conduct issues to remedy.

Two former senior Tesco executives brought separate unfair-dismissal claims after their dismissals in connection with an accounting overstatement. Tesco relied on conduct and some other substantial reason, and alternatively raised Polkey and contributory-conduct reductions.

At a preliminary hearing, the Employment Tribunal directed separate liability and remedy hearings for each claim. It also declined to consolidate the claims, while directing that the same judge hear both liability hearings.

Tesco appealed both case-management decisions on perversity grounds. The central issues were whether the claims should have a single liability hearing and whether the Tribunal could split liability from remedy while reserving all Polkey and contributory-conduct issues.

1. Appeals allowed in part. The appeal against the refusal to hear the two claims together succeeded. The EAT substituted a direction for a single liability hearing. The appeal against splitting liability and remedy failed.

2. A case-management discretion is reviewable only if it exceeds the generous ambit within which reasonable disagreement is possible. The Tribunal was entitled to weigh costs, convenience, hearing length and proportionality. Those factors alone did not justify intervention.

3. However, the Tribunal failed sufficiently to address fairness. The claims involved not merely common background but potentially overlapping evidence concerning the claimants’ interaction, alleged conduct, the decision-making, the common SOSR case, and procedural fairness. Separate hearings created a significant risk of inconsistent findings and unfairness, or its appearance. Directing the same judge to hear both claims did not cure the problem. It created a further risk that evidence or findings in one claim would influence the other without the parties having a fair opportunity to address that material. The fair-minded and informed observer test in Porter v Magill applied.

4. A liability/remedy split is entirely dependent on the case’s features. The Tribunal should make clear whether remedy matters, including Polkey and contributory conduct, will or may be dealt with at liability. Liability concerns the employer’s decision, reasons, process and information at the dismissal date. Statutory contributory-conduct questions require the Tribunal’s own factual findings on the evidence before it.

5. Here, the Tribunal was entitled to defer all Polkey, contributory-conduct and related remedy issues. Those matters could require substantially wider post-dismissal disclosure and further evidence. Deferral promoted proportionate management and did not reflect an erroneous assumption that no document could be relevant at both stages.

• Employment Appeal Tribunal: allowed Tesco’s appeal against separate liability hearings and substituted a direction for one liability hearing; dismissed the appeal against the split between liability and remedy.
• Employment Tribunal: at a preliminary hearing on 14 January 2020, declined to consolidate the two unfair-dismissal claims and directed separate liability and remedy hearings.