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Introduction
Applications for interim relief under s.128 of the Employment Rights Act 1996 have always appeared particularly attractive to high-earners with whistle-blowing claims. The successful Claimant can gain a continuation of employment order requiring the Respondent ex-employer to maintain them on full pay until the final disposal of the claim (including appeal). In this article we discuss recent guidance from the EAT, the issues relevant to such an application, and key tactical steps for both sides.
An application for interim relief enables a Claimant to exert a great deal of pressure on the Respondent at a very early stage in proceedings. The Respondent will incur the irrecoverable costs of defending the application, and even if successful may become more inclined to settle. Conversely, an unsuccessful application can hand the tactical advantage to a properly-advised and fully-prepared Respondent.
Statutory background
S.128 ERA provides that an employee bringing a claim for unfair dismissal who alleges that the dismissal occurred because of his activities as a union member; health and safety representative; employee representative for the purposes of TUPE; trustee of an occupational pension fund; or because he has made a protected disclosure may apply for interim relief.
Under s.129(1), if it appears to the tribunal hearing the application that “it is likely that…. the tribunal will find that the reason …for his dismissal is one of those specified” then it will ask the employer to reinstate or re-engage the employee on terms not less favourable than those applicable had he not been dismissed. Where the employer is unwilling to do so (as we would expect in most cases) then the tribunal will make a continuation of employment order (section 129(9)), with the effect that the contract of employment continues in force from the date of its termination until the determination or settlement of the complaint.
Any payments made under this order are not recoverable by a Respondent who succeeds at the full merits hearing, so a Claimant successful at the interim stage will effectively have their claim funded all the way through to trial and any subsequent appeal.
Relevant caselaw
The key word in the s.129(1) test for the Claimant is “likely”. The leading authority remains that of the EAT in Taplin v Shippam Ltd, where it was alleged by the employee that he was dismissed for taking part in trade union activities. The statutory test for the granting of interim relief was a forerunner to, and in comparable terms to, that in s.129(1).
In considering at length the meaning of “likely”, Slynn J rejected the submission it was having a “reasonable prospect of success”, on the basis that “likely” requires a higher degree of certainty. He stopped short of setting the threshold as high as “a real possibility of success”, observing that the Oxford English Dictionary defines ‘likely’ as ‘probable’. He concluded that “the right approach is expressed in a colloquial phrase suggested to us [as] whether the applicant has established that he has a “pretty good” chance of succeeding in the final application to the tribunal.”
In Dandpat v University of Bath (2009) it was submitted to the EAT that Taplin should be revisited in light of the House of Lords' decision in SCA Packaging Limited v Boyle (2009) ICR 1056. In that case it had been held that the word "likely" in the context of the Disability Discrimination Act 1995 meant "could well happen". This submission was firmly rejected by the EAT. Mr Justice Underhill said that there were "good policy reasons for setting the test comparatively high... in the case of applications for interim relief".
Taplin has also been applied by the EAT in whistle-blowing claims in the cases of Raja v Secretary of State for Justice (2009) and Ministry of Justice v Sarfraz (2011).
In Raja, Mr Raja had appealed on two grounds – firstly that the Employment Judge at first instance had erred in adopting the Taplin interpretation of “likely”, secondly, that she should not have refused to hear his application on the basis that the large volume of material produced to the hearing (which also related to his claims of race and disability discrimination) was not appropriate in an application for an “emergency order”.
HHJ Birtles in the EAT refused to depart from Taplin itself in any respect and, as the EAT had done in Dandpat, declined to adopt (without giving reasons) the weaker test for “likely” set by the House of Lords in SCA Packaging Limited as meaning "could well happen". He also observed that the Respondent’s contention that the Claimant “should be required to show specific reasons why his prospects of success are sufficiently strong to make interim relief appropriate” added a gloss which is not contained in the statutory language. This showed clearly that he did not think that the test for the Claimant in Taplin required anything to be added to it.
As to Mr Raja’s second ground of appeal, HHJ Birtles found that the volume of material was not in itself a reason to refuse the application. This is still relevant to the practical and tactical considerations below.
In the 2011 EAT case of Ministry of Justice v Sarfraz, Mr Justice Underhill again refused to depart from Taplin, despite commenting that he did not think that "a pretty good chance of success" was obviously distinguishable from "reasonable chance of success", arguing that the essential message in Taplin was that "likely" meant something "nearer to certainty than mere probability".
Burden of proof
The test in s.128 is whether it is likely that the Claimant will show at the final hearing that the reason for dismissal was the making of a protected disclosure.
In Ministry of Justice v Sarfraz (above), Mr Justice Underhill looked at s.128 in conjunction with the definition of "qualifying disclosure" contained in s.43C and said that in order to make an order under s.128 and s.129, the judge hearing the application would need to decide that it was likely that the Tribunal at final hearing would find that:-
It is noted, however, that changes to s.43 ERA introduced by the Enterprise and Regulatory Reform Act 2013 (ERRA), which are due to come into force on 25 June 2013, will mean that this test must be amended. Under the ERRA 2013, there will no longer be a requirement that a disclosure is made in "good faith" (as in (4) above) and there will be a new requirement that the Claimant in making the disclosure had a reasonable belief that the disclosure was "in the public interest".
Prior to ERRA 2013 it was settled law, following Parkins v Sodexho (2002), that there was no requirement that a disclosure be "in the public interest" for an employee to be protected by whistleblowing legislation. In Parkins, the EAT held that a qualifying disclosure could include disclosure of information about a breach of the whistleblower's own contract of employment. Parkins was, therefore, seen to significantly widen the scope of protectable disclosures, allowing employees considering themselves at risk of dismissal or with insufficient service to bring an ordinary claim for unfair dismissal to make tactical disclosures regarding any breach of their employment contracts (including a breach of the implied term of trust and confidence) in order to bring a claim for unfair dismissal and seek unlimited damages as a whistleblower. In a 2011 speech to parliament, the Secretary of State for Business, Innovation and Skills, Vince Cable, referred to the widening of the definition of qualifying disclosures to include breaches of personal contracts of employment as a "loophole" which needed to be closed and said that it was "not what the legislation is designed to achieve".
The new requirement under the ERRA that disclosures will only qualify if they are made in the reasonable belief that they are "in the public interest" should, therefore, narrow the scope of qualifying disclosures and the options for employees to make claims under whistleblowing legislation. It is not yet clear how "the public interest" will be judged, but it is noted that the test will be whether the Claimant had a "reasonable belief" that the disclosure was in the public interest, rather than that it was in fact in the public interest, perhaps indicating that the test will be a subjective one based on the circumstances known to the Claimant. This means that it will become much harder for a Claimant to bring a claim quickly to further their own agendas.
The test in whistle-blowing cases generally (Kuzel v Roche Products Ltd) is, firstly, whether the Claimant has put forward evidence which casts doubt on the reason for dismissal advanced by the employer. If he has, then the burden shifts to the employer to prove the reason for dismissal. Since there will be more evidence available at the full hearing it may be harder (depending on the view taken by the Employment Judge of the authorities) for a Claimant at the interim relief stage
.
Tactical and practical considerations
An application for interim relief must be made within seven days of the effective date of termination and heard by the Tribunal “as soon as practicable after receiving the application.” The Claimant should include full particulars of the protected disclosures and supporting evidence so as to maximise pressure on the Respondent.
Immediately upon receipt of the ET1, the Respondent should call the tribunal to ascertain the hearing date, which may be as soon as one week’s time. The Respondent must maximise its limited preparation time to best effect. In particular, it should ensure that its case at the interim relief hearing is consistent with its subsequent ET3, necessitating a lot of immediate background work.
The Respondent needs to show that the Claimant does not have a “pretty good" chance of success at the full merits hearing. The costs that will result from the Claimant being granted interim relief are potentially large, especially if the Claimant is a highly-paid member of senior management. The cost of keeping the employee on at full pay until final disposal of the litigation is not recoverable by a Respondent, even where the claim fails. In addition, compliance with the continuation of employment order may raise corporate governance issues if the Claimant is also a director. A wise Respondent will therefore prepare as full a defence as possible in the time available, including obtaining evidence from key witnesses such as the person who took the decision to dismiss (often the Managing Director) and preferably a second manager with specific technical knowledge relating to the purported disclosures (often the Finance Director).
Although oral evidence is not required, and is unusual at such hearings, the EAT’s comments in Raja that the Employment Judge must consider the key issues relating to the claim suggested that oral evidence would become more important in the future. HHJ Birtles' comments in that case about the volume of material also seemed to suggest that the courts may in future be required to consider in detail a considerable amount of evidence before making a decision. However, in the recent EAT case of London City Airport Ltd v Chacko (2013) Mr Recorder Luba QC said that the task of the employment judge in an interim relief hearing is to make "an expeditious summary assessment as to how the matter looks to him on the material that he has" and that this would involve "far less detailed scrutiny of the respective cases of each of the parties and their evidence than will be ultimately undertaken at the full hearing of the claim". The point is now much better settled that this is not an opportunity to hear the matter in full. In our experience the Employment Judge will hear Counsel for both sides and evidence-in-chief with reference to key documents, and further clarification will be sought as necessary. Cross-examination is possible, although unlikely given that the application will probably only be listed for a single day including remedy.
Given the hurdle the Claimant needs to get over, and the new requirement in whistleblowing cases for Claimants to show that disclosures were reasonably believed to be "in the public interest", a Respondent who carries out detailed preparation in order to rebut the specific protected disclosures is likely to succeed in its defence at the interim relief stage.
Conclusions
It is unknown exactly how many whistle-blowing applications to the employment tribunal each year include claims for interim relief. Although it can still be a powerful weapon in the hands of the right Claimant, the effect of Dandpat and Raja approving Taplin and recent cases such as Sarfraz and Chacko is that “likely” retains its ordinary meaning. Whilst this is unlikely to bring an end to such applications, this is very much to the benefit of Respondents as it means that a Claimant has a high hurdle to overcome in order to obtain interim relief. Moreover, an unsuccessful Claimant risks the Judge at the interim stage making findings of fact which could later adversely affect his case. Equally helpful for the Respondent in our experience is that the Judge at the interim stage may make no findings of fact at all, leaving the Respondent’s advisers free to add to the detailed work already done prior to the full hearing, thereby delivering some value back to the Respondent from what is a costly process.
Introduction
Applications for interim relief under s.128 of the Employment Rights Act 1996 have always appeared particularly attractive to high-earners with whistle-blowing claims. The successful Claimant can gain a continuation of employment order requiring the Respondent ex-employer to maintain them on full pay until the final disposal of the claim (including appeal). In this article we discuss recent guidance from the EAT, the issues relevant to such an application, and key tactical steps for both sides.
An application for interim relief enables a Claimant to exert a great deal of pressure on the Respondent at a very early stage in proceedings. The Respondent will incur the irrecoverable costs of defending the application, and even if successful may become more inclined to settle. Conversely, an unsuccessful application can hand the tactical advantage to a properly-advised and fully-prepared Respondent.
Statutory background
S.128 ERA provides that an employee bringing a claim for unfair dismissal who alleges that the dismissal occurred because of his activities as a union member; health and safety representative; employee representative for the purposes of TUPE; trustee of an occupational pension fund; or because he has made a protected disclosure may apply for interim relief.
Under s.129(1), if it appears to the tribunal hearing the application that “it is likely that…. the tribunal will find that the reason …for his dismissal is one of those specified” then it will ask the employer to reinstate or re-engage the employee on terms not less favourable than those applicable had he not been dismissed. Where the employer is unwilling to do so (as we would expect in most cases) then the tribunal will make a continuation of employment order (section 129(9)), with the effect that the contract of employment continues in force from the date of its termination until the determination or settlement of the complaint.
Any payments made under this order are not recoverable by a Respondent who succeeds at the full merits hearing, so a Claimant successful at the interim stage will effectively have their claim funded all the way through to trial and any subsequent appeal.
Relevant caselaw
The key word in the s.129(1) test for the Claimant is “likely”. The leading authority remains that of the EAT in Taplin v Shippam Ltd, where it was alleged by the employee that he was dismissed for taking part in trade union activities. The statutory test for the granting of interim relief was a forerunner to, and in comparable terms to, that in s.129(1).
In considering at length the meaning of “likely”, Slynn J rejected the submission it was having a “reasonable prospect of success”, on the basis that “likely” requires a higher degree of certainty. He stopped short of setting the threshold as high as “a real possibility of success”, observing that the Oxford English Dictionary defines ‘likely’ as ‘probable’. He concluded that “the right approach is expressed in a colloquial phrase suggested to us [as] whether the applicant has established that he has a “pretty good” chance of succeeding in the final application to the tribunal.”
In Dandpat v University of Bath (2009) it was submitted to the EAT that Taplin should be revisited in light of the House of Lords' decision in SCA Packaging Limited v Boyle (2009) ICR 1056. In that case it had been held that the word "likely" in the context of the Disability Discrimination Act 1995 meant "could well happen". This submission was firmly rejected by the EAT. Mr Justice Underhill said that there were "good policy reasons for setting the test comparatively high... in the case of applications for interim relief".
Taplin has also been applied by the EAT in whistle-blowing claims in the cases of Raja v Secretary of State for Justice (2009) and Ministry of Justice v Sarfraz (2011).
In Raja, Mr Raja had appealed on two grounds – firstly that the Employment Judge at first instance had erred in adopting the Taplin interpretation of “likely”, secondly, that she should not have refused to hear his application on the basis that the large volume of material produced to the hearing (which also related to his claims of race and disability discrimination) was not appropriate in an application for an “emergency order”.
HHJ Birtles in the EAT refused to depart from Taplin itself in any respect and, as the EAT had done in Dandpat, declined to adopt (without giving reasons) the weaker test for “likely” set by the House of Lords in SCA Packaging Limited as meaning "could well happen". He also observed that the Respondent’s contention that the Claimant “should be required to show specific reasons why his prospects of success are sufficiently strong to make interim relief appropriate” added a gloss which is not contained in the statutory language. This showed clearly that he did not think that the test for the Claimant in Taplin required anything to be added to it.
As to Mr Raja’s second ground of appeal, HHJ Birtles found that the volume of material was not in itself a reason to refuse the application. This is still relevant to the practical and tactical considerations below.
In the 2011 EAT case of Ministry of Justice v Sarfraz, Mr Justice Underhill again refused to depart from Taplin, despite commenting that he did not think that "a pretty good chance of success" was obviously distinguishable from "reasonable chance of success", arguing that the essential message in Taplin was that "likely" meant something "nearer to certainty than mere probability".
Burden of proof
The test in s.128 is whether it is likely that the Claimant will show at the final hearing that the reason for dismissal was the making of a protected disclosure.
In Ministry of Justice v Sarfraz (above), Mr Justice Underhill looked at s.128 in conjunction with the definition of "qualifying disclosure" contained in s.43C and said that in order to make an order under s.128 and s.129, the judge hearing the application would need to decide that it was likely that the Tribunal at final hearing would find that:-
- the Claimant had made a disclosure to his employer;
- the Claimant believed that that disclosure tended to show one or more of the things itemised at (a) to (f) under section 43B(1);
- that belief was reasonable;
- the disclosure was made in good faith; and
- the disclosure was the principal reason for his dismissal.
It is noted, however, that changes to s.43 ERA introduced by the Enterprise and Regulatory Reform Act 2013 (ERRA), which are due to come into force on 25 June 2013, will mean that this test must be amended. Under the ERRA 2013, there will no longer be a requirement that a disclosure is made in "good faith" (as in (4) above) and there will be a new requirement that the Claimant in making the disclosure had a reasonable belief that the disclosure was "in the public interest".
Prior to ERRA 2013 it was settled law, following Parkins v Sodexho (2002), that there was no requirement that a disclosure be "in the public interest" for an employee to be protected by whistleblowing legislation. In Parkins, the EAT held that a qualifying disclosure could include disclosure of information about a breach of the whistleblower's own contract of employment. Parkins was, therefore, seen to significantly widen the scope of protectable disclosures, allowing employees considering themselves at risk of dismissal or with insufficient service to bring an ordinary claim for unfair dismissal to make tactical disclosures regarding any breach of their employment contracts (including a breach of the implied term of trust and confidence) in order to bring a claim for unfair dismissal and seek unlimited damages as a whistleblower. In a 2011 speech to parliament, the Secretary of State for Business, Innovation and Skills, Vince Cable, referred to the widening of the definition of qualifying disclosures to include breaches of personal contracts of employment as a "loophole" which needed to be closed and said that it was "not what the legislation is designed to achieve".
The new requirement under the ERRA that disclosures will only qualify if they are made in the reasonable belief that they are "in the public interest" should, therefore, narrow the scope of qualifying disclosures and the options for employees to make claims under whistleblowing legislation. It is not yet clear how "the public interest" will be judged, but it is noted that the test will be whether the Claimant had a "reasonable belief" that the disclosure was in the public interest, rather than that it was in fact in the public interest, perhaps indicating that the test will be a subjective one based on the circumstances known to the Claimant. This means that it will become much harder for a Claimant to bring a claim quickly to further their own agendas.
The test in whistle-blowing cases generally (Kuzel v Roche Products Ltd) is, firstly, whether the Claimant has put forward evidence which casts doubt on the reason for dismissal advanced by the employer. If he has, then the burden shifts to the employer to prove the reason for dismissal. Since there will be more evidence available at the full hearing it may be harder (depending on the view taken by the Employment Judge of the authorities) for a Claimant at the interim relief stage
.
Tactical and practical considerations
An application for interim relief must be made within seven days of the effective date of termination and heard by the Tribunal “as soon as practicable after receiving the application.” The Claimant should include full particulars of the protected disclosures and supporting evidence so as to maximise pressure on the Respondent.
Immediately upon receipt of the ET1, the Respondent should call the tribunal to ascertain the hearing date, which may be as soon as one week’s time. The Respondent must maximise its limited preparation time to best effect. In particular, it should ensure that its case at the interim relief hearing is consistent with its subsequent ET3, necessitating a lot of immediate background work.
The Respondent needs to show that the Claimant does not have a “pretty good" chance of success at the full merits hearing. The costs that will result from the Claimant being granted interim relief are potentially large, especially if the Claimant is a highly-paid member of senior management. The cost of keeping the employee on at full pay until final disposal of the litigation is not recoverable by a Respondent, even where the claim fails. In addition, compliance with the continuation of employment order may raise corporate governance issues if the Claimant is also a director. A wise Respondent will therefore prepare as full a defence as possible in the time available, including obtaining evidence from key witnesses such as the person who took the decision to dismiss (often the Managing Director) and preferably a second manager with specific technical knowledge relating to the purported disclosures (often the Finance Director).
Although oral evidence is not required, and is unusual at such hearings, the EAT’s comments in Raja that the Employment Judge must consider the key issues relating to the claim suggested that oral evidence would become more important in the future. HHJ Birtles' comments in that case about the volume of material also seemed to suggest that the courts may in future be required to consider in detail a considerable amount of evidence before making a decision. However, in the recent EAT case of London City Airport Ltd v Chacko (2013) Mr Recorder Luba QC said that the task of the employment judge in an interim relief hearing is to make "an expeditious summary assessment as to how the matter looks to him on the material that he has" and that this would involve "far less detailed scrutiny of the respective cases of each of the parties and their evidence than will be ultimately undertaken at the full hearing of the claim". The point is now much better settled that this is not an opportunity to hear the matter in full. In our experience the Employment Judge will hear Counsel for both sides and evidence-in-chief with reference to key documents, and further clarification will be sought as necessary. Cross-examination is possible, although unlikely given that the application will probably only be listed for a single day including remedy.
Given the hurdle the Claimant needs to get over, and the new requirement in whistleblowing cases for Claimants to show that disclosures were reasonably believed to be "in the public interest", a Respondent who carries out detailed preparation in order to rebut the specific protected disclosures is likely to succeed in its defence at the interim relief stage.
Conclusions
It is unknown exactly how many whistle-blowing applications to the employment tribunal each year include claims for interim relief. Although it can still be a powerful weapon in the hands of the right Claimant, the effect of Dandpat and Raja approving Taplin and recent cases such as Sarfraz and Chacko is that “likely” retains its ordinary meaning. Whilst this is unlikely to bring an end to such applications, this is very much to the benefit of Respondents as it means that a Claimant has a high hurdle to overcome in order to obtain interim relief. Moreover, an unsuccessful Claimant risks the Judge at the interim stage making findings of fact which could later adversely affect his case. Equally helpful for the Respondent in our experience is that the Judge at the interim stage may make no findings of fact at all, leaving the Respondent’s advisers free to add to the detailed work already done prior to the full hearing, thereby delivering some value back to the Respondent from what is a costly process.
