Payco Services Ltd v Sinka

Where an Employment Tribunal has directed and heard a preliminary hearing on substantive issues, it must ordinarily determine those issues on the evidence adduced. A later Tribunal may not materially revisit that case-management decision merely because the evidence is unclear or further evidence might exist. It must first identify a material change of circumstances or another exceptional reason.

A material change of course also requires procedural fairness. The parties must be told of the proposed course and given a fair opportunity to make submissions. The power to add a respondent under the 2013 Rules of Procedure is discretionary and must be exercised judicially, having regard to all relevant circumstances. An ACAS early-conciliation certificate is not automatically required once proceedings have begun, but its absence and the procedural history remain relevant considerations.

The claimant brought Employment Tribunal claims against Payco Services Ltd arising from work performed through an agency for Day Aggregates. A case-management preliminary hearing directed a further public preliminary hearing to determine employment-status, termination, discrimination-liability, strike-out and deposit-order issues.

After hearing evidence and submissions, the Employment Judge made some findings but concluded that the issues could not be determined unless 247 Staff and Day Aggregates were joined. She directed their joinder and a further case-management hearing. Payco appealed. The claimant was debarred from participating in the appeal, but the appeal was determined on its merits.

The central issue was whether the Tribunal could decline to decide the listed and heard preliminary issues, and instead join further respondents without giving the parties an opportunity to address that course.

1. Appeal allowed. The Employment Judge erred by declining to determine the substantive preliminary issues after they had been listed, heard and argued. The earlier case-management direction could be materially revisited only upon a material change of circumstances or another exceptional reason. The Judge identified neither, and did not undertake that exercise. [2006] ICR 655 and [2002] ICR 1251 supported that approach.

2. Unclear, conflicting or incomplete evidence did not justify abandoning the fact-finding task. The Tribunal had to decide the issues as best it could on the evidence before it, applying the burden of proof and the balance of probabilities. The possible existence of documents or witnesses held by third parties did not itself justify their joinder; procedural routes for third-party disclosure and witness orders were available.

3. The decision was also procedurally unfair. It substantially changed the direction of the litigation, yet neither party was warned that joinder and non-determination were under consideration or allowed to make submissions. The discretion to add respondents under Rule 34 of the 2013 Rules of Procedure had to be exercised judicially. Although an ACAS certificate was not an automatic precondition to joinder after proceedings had begun, the absence of certificates, the rejected claim against 247 Staff, and the absence of a joinder application were relevant matters which the Judge had not considered.

4. The partial findings of fact and the joinder decision could not stand. The issues of Payco's employment status and termination of the engagement were remitted for a fresh preliminary hearing before a differently constituted Tribunal, involving Payco and the claimant only. The EAT substituted a determination that Payco could not be liable for the alleged race discrimination by Mr Harding, who was undisputedly an employee or agent of Day Aggregates.

• Employment Appeal Tribunal: allowed Payco's appeal and set aside the Employment Tribunal's decision to defer determination and join further respondents: [2020] UKEAT 0134_19_1501.

• Employment Tribunal: following a preliminary hearing on 9 October 2018, its written judgment and reasons sent on 11 December 2018 held that the listed issues could not be determined without joining 247 Staff and Day Aggregates. It directed their joinder and further case management.