Tariq Sami v Abel Avellan

A deposit order under rule 39 requires a proper basis for doubting that a party can establish facts essential to the allegation. The threshold is lower than for strike-out, but a tribunal must give relevant and sufficient reasons, particularly where core facts are disputed.

A short period of employment and a disputed assertion of poor performance do not, without more, show that a discrimination claim has little reasonable prospect of success. Documentary material and factual allegations going beyond bare assertion may preclude a deposit order.

Under section 111 of the Equality Act 2010, liability for instructing, causing or inducing a contravention depends on the alleged inducer being in a relationship with the instructed person which enables it to commit a basic contravention against that person.

The claimant alleged race discrimination arising from his employment by the first respondent. He also advanced claims against the second respondent, the first respondent's parent company, based on agency, inducing discrimination and knowingly helping discrimination. He brought a further claim against the fourth respondent, chairman of the second respondent, for knowingly helping a discriminatory dismissal or denial of an appeal.

The Employment Tribunal struck out claims against the third respondent and made deposit orders of £150 against the claims involving the second and fourth respondents. When the claimant did not pay, those claims were struck out. He appealed only the deposit orders and consequential strike-outs.

The central issues were whether the Tribunal had a proper basis under rule 39 to find the claims had little reasonable prospect of success, and whether the section 111 claim against the second respondent was legally viable.

1. Appeal allowed in part. The deposit orders against the second and fourth respondents, and the consequential strike-out orders for non-payment, were set aside. The section 111 element of the appeal against the second respondent was dismissed because that claim would inevitably fail.

2. Rule 39 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 has a lower threshold than strike-out. It nevertheless requires a proper basis for doubting the party's ability to prove facts essential to the claim. The assessment is summary, but caution and sufficient reasons are required where the core facts are disputed.

3. The Tribunal's reasons for requiring a deposit from the fourth respondent's section 112 claim were irrelevant. The brief employment period was neutral, and the pleaded dispute between poor performance and discrimination merely identified the issue for trial. Those matters did not show little reasonable prospect of success. The fourth respondent's non-Lithuanian status could not render the error immaterial, particularly given material suggesting that dismissal had been authorised by him and that culture may have been a reason.

4. The claimant's allegations against the second respondent under agency and section 112 were supported by matters beyond bare assertion. These included a power of attorney used to sign termination documents, the small UK operation, asserted management involvement by the parent company, and contemporaneous material concerning dismissal. Employment by the first respondent did not undermine the possibility that the second respondent acted as its agent or knowingly helped discrimination.

5. Section 111(7) required the second respondent to be capable, by virtue of its relationship with the first respondent, of committing a basic contravention against that respondent. The relationship between the two corporate entities did not meet that condition. The claimant accepted that the section 111 claim could not succeed, so remittal would serve no purpose.

• Employment Appeal Tribunal: Allowed the appeal against the deposit orders except insofar as it concerned the legally unsustainable section 111 claim: [2022] EAT 72.
• Employment Tribunal, Watford: Employment Judge Bartlett made deposit orders of £150 in respect of claims against the second and fourth respondents. The claims were subsequently struck out when the deposits were not paid.