Royal Court Reverses Employment Tribunal in First Review of Case Management Powers

What happens in Jersey if you fail to file a response to an employment or discrimination claim in time? There is a strict deadline of 21 days from the date the claim is sent to a respondent (not 21 days from receipt), although respondents can apply for an extension of time provided they do so within that initial 21 day period. If however, respondents fail to file a response in time, then judgment in default of a response will be made against them.

The position of the Employment & Discrimination Tribunal ("Tribunal") has been that they do not have the power to admit a response filed out of time or to set-aside a judgment that is given in default of a response. This is because the Employment and Discrimination Tribunal Procedure Order 2016 ("Procedure Order") does not contain an express provision that deals with this scenario. According to the Tribunal Annual Report for 2018, almost 8% of claims are resolved in this way. This suggests that a number of employers have been prevented from defending claims, but need not have been.

This position could give rise to serious injustice for an employer. For instance, it would be open to a claimant to provide a false address for a respondent. This would lead to an employer not being aware of a claim until after judgment had been entered against it, but would not then allow that employer to get the judgment set-aside.

In the judgment issued this week of Ladbrokes v Lawrie, the Royal Court was asked to consider the Procedure Order, in particular, notwithstanding the above gap, whether the tribunal had the power to set-aside a judgment in default. This is the first time that the Tribunal's case management powers have come before the Royal Court, and the Court took the opportunity to provide some clarification on the powers of the Tribunal.

Particular emphasis was placed on article 89 of the Employment (Jersey) Law 2003, which states: "The Tribunal shall have, as regards the attendance, swearing and examination of witnesses, the production and inspection of documents, and other matters necessary or proper for the due exercise of its jurisdiction, all such powers, rights and privileges as are vested in the Royal Court."

Those familiar with litigation in Jersey will know that the Royal Court can set-aside a judgment in default, where the defendant provides an explanation for its failure and can show that it has an arguable defence to the claim. The question for the Royal Court was whether it was necessary for the Tribunal to have a similar power.

The Royal Court held that there was a clear gap in the Procedure Order, which could lead to absurd or unjust results. As a result it found that it was a necessary part of the Tribunal's case management powers, under Article 89 of the Employment (Jersey) Law 2003, for it to have the power to set-aside a judgment in default of a response.

As the Tribunal had misdirected itself in holding that it did not have this power, and therefore did not consider what steps it should take in response to Ladbrokes' application, the Royal Court held that the matter should go back to the Tribunal for it to consider afresh. It is anticipated that the Tribunal will give directions on how it expects an application to set-aside a judgment in default to be dealt with in the future.

The Royal Court's decision brings the power in the Tribunal in line with not only the Royal Court and Petty Debts Court, but also the practice in the English Employment Tribunal.

Comment

This decision should be welcomed by employers in Jersey. Whereas previously an employer that missed the 21 day deadline would be absolutely barred from contesting the merits of the claim, in appropriate circumstances the Tribunal may now allow a response to be brought out of time and therefore set-aside judgment in default of a response. There will still be cases however, where an employer either has no justifiable reason for missing the deadline, or has filed no arguable defence. In either of these scenarios we would anticipate that the Tribunal would refuse to set-aside the judgment.

This case is a salutary reminder that correspondence from the Tribunal needs to be dealt with immediately. If you receive a claim from the Tribunal, you need to:

  1. Prepare and submit your response within the 21 day time limit;
  2. If you know you need longer, you should apply for an extension of this time limit within the 21 day period; and
  3. Although the Tribunal does have the ability to set-aside a judgment in default, it is likely that this is a power that it will use sparingly and you will need to have a good reason for not filing a response and an arguable defence.

We recommend taking legal advice as soon as possible on receipt of a claim to ensure that the necessary steps are taken in time. Walkers' specialist contentious employment law team have significant experience in advising clients on responses to Tribunal claims.

Note

Daniel Read, Senior Counsel in the Employment Team at Walkers, acted for the Respondent on a pro bono basis due to the importance of the issues.

JERSEY
Marc SeddonPartnerT +44 (0)1534 700 761marc.seddon@walkersglobal.com
Daniel ReadSenior CounselT +44 (0) 1534 700 764daniel.read@walkersglobal.com