M Rajput & Anor v Sky Retail Stores Limited

This appeal concerns whether the Employment Appeal Tribunal should permit a new legal point to be run on appeal which was not argued before the employment tribunal. The claimants were Store Managers whose Store Manager Allowance (SMA) was withdrawn following a restructure; the employment tribunal found that the withdrawal and role abolition amounted to an objective Hogg v Dover College type termination of their existing contracts and dismissed their wages claims, while rejecting their collective consultation claims for lack of standing.

The appellants sought to argue in the EAT that, in the light of Geys v Sociéte Générale, the elective theory of termination applies to contract claims and thus a Hogg-type finding should not automatically defeat a contract-based wages claim when the employees remained working and sued. The rule 3(10) judge allowed that point to proceed to a full hearing.

The EAT held that the Geys-based argument was a substantive new point not run before the tribunal and required permission. The respondent was entitled to review of the rule 3(10) decision because it had not had the opportunity to be heard on that procedural question. Applying the Rance principles, the judge concluded the point was arguable but that, given the claimants had specialist representation at tribunal, the matter would require remission to the tribunal if successful, and considerations of finality and fairness outweighed the public interest in determining the novel doctrinal point on this occasion. Permission to run the new point was refused and the appeal was dismissed.

Background and parties: The appellants were Store Managers paid a Store Manager Allowance (SMA) in addition to basic pay and commission. The respondent restructured, abolished the Store Manager role and SMA, increased basic pay and changed commissions. The claimants continued to work under the new terms and brought claims including unlawful deduction from wages (SMA) and failure of collective consultation under TULRCA s188. The tribunal found the changes amounted to termination of the existing contracts on Hogg v Dover College principles and dismissed the wages claims; it also held the claimants lacked standing to bring the s188 claims.

Procedural posture: The tribunal made a reserved merits decision on 24 November 2021 (after a preliminary ruling in August 2021). The claimants appealed to the EAT. At a rule 3(10) hearing a judge directed that one ground of appeal (seeking to apply Geys to contract-based claims) proceed to a full appeal hearing. The respondent contended that the point had not been run below and that there was no reason to allow it now.

Nature of the application: The appellants sought permission to argue, for the first time in the EAT, that Hogg v Dover College should be interpreted or applied in light of Geys v Sociéte Générale such that an employee who stays and sues preserves contract rights and is not automatically deprived of a wages claim by a Hogg-type finding.

Issues framed by the court:

• Is the Geys-based argument a new point of law not run before the employment tribunal?
• If so, should the EAT exercise its discretion to allow the new point to be raised on appeal?
• Would it be practicable and fair to decide the point in the EAT without remitting to the tribunal?

Court’s reasoning and disposition: The judge concluded the argument was indeed a substantive new point that had not been advanced in the tribunal and so required permission. The respondent was entitled to a review of the rule 3(10) judge’s direction because it had not been heard on that procedural matter. Applying the guidance in Secretary of State for Health v Rance, the judge acknowledged the point was arguable and novel, but held that allowing it would likely require a remission to the tribunal (for factual and evaluative issues such as whether the claimants had worked under protest or affirmed the new terms). The claimants had been represented by specialist counsel at tribunal and had had opportunity to run the point below. Balancing finality, fairness to the respondent and the likelihood of remission, the judge refused permission to run the new ground and dismissed the appeal.

The appeal is dismissed. The EAT held that the Geys-based argument was a substantive new point of law that had not been run before the employment tribunal and therefore required permission to be introduced on appeal. The respondent was entitled to a review of the rule 3(10) judge’s decision because it had not had the opportunity to be heard on that question. Applying the Rance principles, although the point was arguable and of doctrinal interest, permission was refused because the appellants had specialist representation below, the point would likely require remission to the tribunal for factual and evaluative findings (for example as to affirmation or protest), and considerations of fairness and finality outweighed permitting the novel point to be decided in the EAT on this occasion.

Employment Tribunal: preliminary hearing c. March 2021 (reserved decision Aug 2021); full merits judgment dismissing complaints promulgated 24 November 2021. Appeal to Employment Appeal Tribunal initiated 5 January 2022; rule 3(10) hearing directed one ground (ground 1) to a full hearing. Employment Appeal Tribunal (HHJ Auerbach): judgment [2024] EAT 46, 19 March 2024 dismissing the appeal and refusing permission to run the new point of law.