Recalibrating Early Conciliation

Written by Nathaniel Caiden

Image of Nathaniel Caiden

Introduction

Last week’s Court of Appeal’s decision of Sainsbury's Supermarkets Ltd v Clark [2023] EWCA Civ 386 went much further than incrementally establishing the position of early conciliation certificates in group claims against a respondent.  Indeed, the case considered how early conciliation intertwined with the Tribunal rules on accepting and rejecting, and stated the previous main lines of Employment Appeal Authority (“EAT”) authority in this area were wrongly decided.  It is these wider affects that are in the main considered in this blog, as well as the practical consequences that follow the decision.

Background facts

The claims concerned equal pay claims against the well-known supermarket retailer, which along with others is facing similar litigation.  Equal pay litigation is not exempt from the requirement to undertaken ACAS early conciliation and a preliminary issue arose as to whether the non-inclusion of an ACAS early conciliation certificate number by some of the claimants meant these should be rejected under rule 10(1)(c)(i) in Schedule 1 of Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (“ET Rules 2013”).  This provides that the “Tribunal shall reject a claim if -…(c) it does not contain one of the following – (i) an early conciliation number; (ii) confirmation that the claim does not institute any relevant proceedings; or (iii) confirmation that one of the early conciliation exemptions applies”.

It is worth appreciating that regulation 3 of Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations 2014 provides for the following exemption to have an ACAS early conciliation certificate:

(a) another person (“B”) has complied with that requirement in relation to the same dispute and A wishes to institute proceedings on the same claim form as B;

Therefore, seemingly the ordinary way for a mass equal pay claim would occur as envisaged by the rules and ET1 form is that person B gets an ACAS early conciliation certificate, puts it down on the ET1A (the form used for multiple claimants, although the regular ET1 also has the same box) in box 2.3 and in box 15 where the narrative following the additional information is “If you’re part of a group claim give the Acas early conciliation certificate numbers for others in your group.  If they don’t have numbers tells us why.” set out which person or other people do not have a number with the explanation being, they are relying upon reg.3(1)(a) exemption.  Alternatively, if the ‘lead’ claimant does not have the ACAS early conciliation number, in box 2.3 the box is ticked that states “Another person I’m making the claim with has an Acas early conciliation” and box 15 provides instead the details of the number that is being relied upon that belongs to another person in the claim form. 

In Clark, it appears from the EAT judgment there was no reference to the exemption (see EAT judgment [13]).  ET1s instead contains a schedule of claimants with dates of ACAS early conciliation but not the certificate numbers.  Notably it was recorded by lead counsel for Sainsbury’s that “if the Schedule had contained a column with entries accurately recording the number of each Claimant’s EC certificate the point in issue on this appear would have been unarguable” (Court of Appeal judgment [15]).

So, the point appears to be the exemption was not specifically invoked and therefore the appeal was being approached simply as being an issue with the non-provision of an ACAS early conciliation certificate on the form in relation to some of the Claimants.

EAT’s approach

The EAT’s approach was that the grounds for rejecting an ET1 under rule 10(1)(c) concerned an ET1 that did not contain “one” of the following “an early conciliation number…. confirmation that the claim does not institute any relevant proceedings….confirmation that one of the early conciliation exemption applies”.  On this case whilst factually there was no reliance on an exemption (and early conciliation did apply) the ET1 did contain “an” ACAS early conciliation number.  The language had therefore been met, there was no need for each number to be contained, and the reliance on the case of E.ON Control Solutions Ltd v Caspall [2020] ICR 552 and Sterling v United Learning Trust UKEAT/0439/14/DM was misplaced.  These cases could be distinguished on the grounds they concerned a single claimant and not a multiple claimant.  This can be seen at [28], [36], [38]-[39], [42]-[43], and [46] of the EAT judgment.

Key reasoning of the Court of Appeal

By paragraph 3 of its judgment, the Court of Appeal set out the prism through which the appeal was being interpreted.  It pointed out that the purpose of employment tribunals when originally established was to create “speedy and informal system free of technicalities.  It has been repeatedly stated that employment tribunals should do their best not to place artificial barriers in the way of genuine claims.  Nevertheless, if the Appellant is right, an artificial barrier has indeed been placed in the way of these claims”.

Having done this, the Court of Appeal agreed with the EAT and at paragraph 36 stated its construction was the correct one.  It concluded that “[w]hile a claim form must contain the name and address of each claimant and each respondent, it is sufficient for it to contain the number of an EC certificate on which the name of one of the prospective claimants appeared; and this construction satisfied the principle mentioned by Langstaff P in Software Box v Gannon, which I entirely endorse”.  In summary, in a claim form containing multiple claimants and a single respondent all that is necessary is there is at least one early conciliation number for a claimant that is relevant to the sole respondent.

However, the Court of Appeal went further and also found the EAT decision should separately be upheld by virtue of the following:

(a)    once a claim has been accepted the matter moves from rules 8-14 starting a claim to other sections of the rules.  Assuming there is no rejection of any response, the claim therefore moves to “Initial consideration of claim form and response” (rules 26-28) after which it goes on to “Case management orders and other powers” (rules 29-40).  See [39]-[40] of Court of Appeal judgment;

(b)    a consequence of the above is that if a claim has been accepted, the respondent cannot argue at a later stage that it should have been rejected.  So, the respondent’s approach saying it should have been rejected under rule 10 was not applicable – matters had simply moved on.  See [42] of Court of Appeal judgment;

(c)     the result of moving on to different sections of the rules is that a respondent route to challenge an alleged improper acceptance is to (i) invite the Tribunal in its ET3 to dismiss the claim under rule 27 on the basis that it has no jurisdiction to consider the claim (or part of it) or (ii) make an application that it should be struck out under rule 37 for non-compliance with rules (or no reasonable prospect of success).  See [42] of Court of Appeal judgment;

(d)    however, in considering any such applications and in general errors in early conciliation numbers, rule 6 applies which allows the Tribunal to take “such action as it considers just, which may include all or any of the following – (a) waiving or varying the requirement”.  See [43] of Court of Appeal judgment.

Moreover, with the general application of the rules in mind the Court of Appeal considered key EAT authorities on the subject, and two had been wrongly decided.  It set out that:

(a)    Cranwell v Cullen UKEATPAS/0046/14/SM was correctly decided ([44] of judgment).  The Court of Appeal noted that Section 18A of the Employment Tribunals Act 1996 sets out that (unless an exemption applies) the claimant must provide the information before the claim is brought and failure to provide it meant the tribunal had no jurisdiction.  As an aside, although not stated by the Court of Appeal, Cranwell was in fact a rule 3(10) EAT hearing and she had incorrectly stated in her claim form that an exemption applied.

(b)    Sterling v United Learning Trust UKEAT/0439/14/DM was wrongly decided ([45]-[47] of judgment).  The case of Sterling stood for the authority that the requirement for an early conciliation number was for an accurate (correct) number and thus a tribunal was obliged to reject a claim for failing to include an early conciliation number.  The Court of Appeal disagreed with this reasoning and concluded that that cannot have been Parliament’s intention in situations where ACAS early conciliation has occurred and there is a certificate to prove it.  However, as Sterling was in effect reversed by a rule change it was not deemed necessary to overrule it.  In relation to this rule change, since 2020 judge’s have a discretion to accept a claim where “the early conciliation number on the claim form is not the same as the early conciliation number on the early conciliation certificate” (rule 12(1)(da)”.  The precise phrasing of the discretion is “The claim shall be rejected…unless the judge considers that the claimant made an error in relation to an early conciliation number and it would not be in the interest of justice to reject the claim” (rule 12(2ZA)).

(c)     E.ON Control Solutions Ltd v Caspall [2020] ICR 552 was wrongly decided and is overruled ([48] of judgment).  The critical features of it were that it found that rule 6 was not applicable to circumvent early conciliation issues, that numbers provided in a certificate must be accurate, and that this was an issue that could be raised by a respondent and dealt with at a Preliminary Hearing.  In short, Caspall provided a route to challenge under rule 10 and rule 12 in situations where it was argued the claim had been incorrectly accepted.  Clark however overrules all of this.

What does this mean for future cases?

As stated in the introduction the effect of Clark goes far beyond the narrow point of principle that on an ET1 with multiple claimants if the exemption is not raised it suffices for there to be one ACAS early conciliation number that matches one claimant and the relevant respondent on the ET1.  It appears the following are the results:

(a)    in a situation where there has been no ACAS early conciliation and there should have been, that is there is no valid exemption, the provision of an ‘incorrect’ number in the ET1 (for example one that relates to a certificate involving other parties or made up) or incorrectly ticking the box that an exemption applies, will lead to a rejection.  This is the effect of the Court of Appeal finding Cranwell was correctly decided and noting the requirement of failure to provide the information required by Section 18A of the Employment Tribunals Act 1996 deprives the tribunal of jurisdiction;

(b)    once a claim has been accepted in a situation where the claimant has valid early conciliation certificate, any alleged errors as to ACAS early conciliation numbers on an ET1 are likely to be immaterial.  This is because the proposed routes to challenge are unlikely to prove fruitful.  Taking each in turn.  Under rule 27, assuming that there was no certificate for some reason on the tribunal file, at most the point would be raised by an employment tribunal and the claimant would be able to provide representations that in fact they had a certificate (most likely providing the certificate that was not on the file).  The judge in these circumstances would be able to apply rule 6 to waive the issues and the claim would continue.  Under rule 37, there would unlikely be any strike out successfully achieved.  Jurisdictionally, the claimant has a certificate and can provide one, so the s.18A Employment Tribunals Act 1996 obligation is met.  Moreover, in terms of any allegation that there has been a breach of a procedural rule that is, as all grounds in rule 37, discretionary strike out and a high bar.  In particular, a fair trial is possible, and it would appear that it would be contrary to the overriding objective given the points made in Clark.  Rounding off this point, whilst the Court of Appeal therefore set out the correct route for a respondent challenging ACAS early conciliation issues it appears that practically they are all ‘dead-ends’ as far as a respondent is concerned in a situation where the claimant has the relevant early conciliation certificate;

(c)     building upon the above, in multiple certificate cases so long as the claim is brought in time, the exact certificate relied upon is unlikely to be material.  That is because firstly, the tribunal service tends to accept such claims and the main point of dispute was, prior to Clark challenges later in the process.  Secondly, the claimant would be able to provide all the certificates actually obtained and there is unlikely to be any dismissals or strike outs for the same reasons set out in the sub-paragraph above.

 Nathaniel is a co-author of From Counsel’s new employment law service.  For more information, please see https://www.fromcounsel.com/employment