A recent decision of the Employment Appeal Tribunal in Eagles v Rugged Systems has confirmed the position as to the circumstances in which an Employment Tribunal should exercise its discretion to extend the ordinary three-month time limit for presenting a claim in the Employment Tribunal for an extra three months under the statutory dispute resolution regulations (repealed on 6th April 2009). The decision will be of interest to employers dealing with recent claims for unfair dismissal or who are currently negotiating compromise agreements or dealing with ongoing dismissal procedures in cases where, on a time limit transitional basis, the statutory dispute resolution procedures still apply.

Regulation 15(2) Employment Act 2002 (Dispute Resolution) Regulations 2004 provides that the ordinary three month time limit will be extended by three months if, at the time of expiry, the employee reasonably believed that “a dismissal or disciplinary procedure, whether statutory or otherwise,… was being followed in respect of matters that constituted of or included the substance of the tribunal complaint” . Last year in Towergate London Market Ltd v Harris, the Court of Appeal found that when the ordinary three month time limit for bringing an unfair dismissal claim expired, the Claimant reasonably believed that a dismissal procedure was being followed. Consequently the time limit was extended for another three months pursuant to regulation 15(2). In Towergate, the Claimant was dismissed for redundancy but raised a formal grievance six days before the ordinary time limit was due to expire. The Claimant complained that the assessment criteria used to make her redundant were unfair and inaccurate. She brought her unfair dismissal claim three months later. The Tribunal held that the claim was out of time because she had not ‘appealed’ her dismissal, rather she had raised a “grievance” and so regulation 15 (2) did not apply.

The case eventually made its way to the Court of Appeal where it was held that a Tribunal should ask itself two questions: first, when the ordinary time limit for extending a claim expired, did the employee have a reasonable belief that “a dismissal or disciplinary procedure, whether statutory or otherwise” was being followed. Secondly, if so, were there reasonable grounds for that belief? The Tribunal should avoid an overly technical approach; the test is not whether, as a matter of fact, such a procedure was being followed. It was clear from the wording of regulation 15(2) that the Claimant's belief did not have to be that a statutory procedure was being followed, merely that a procedure was being followed.

This decision has now been followed in Eagles v Rugged Systems where the EAT held that a “procedure” is not limited to an appeal procedure and that negotiations for a Compromise Agreement are also capable of extending time under regulation 15(2). In Eagles, the EAT said that the Tribunal had failed to have regard to the wide connotation of “or otherwise” in regulation 15(2). The offer by the employer of a written compromise, taking a draft away and showing it to a solicitor, the solicitor engaging in negotiations with the employer or its lawyers over a period of time, were all part of a procedure designed to avoid a dispute before the Tribunal. If the Claimant believed that there was some process dealing with the dismissal ongoing, and that belief was formed on reasonable grounds, then she would be entitled to the extension.

What these decisions mean for employers

On 6th April this year the statutory dispute resolution procedures were repealed, along with the Tribunal’s discretion to extend time limits by three months under regulation 15(2). These decisions will therefore have limited relevance to employers making dismissals in the future. Nevertheless, the issues which arose in these cases are still relevant to claims which may still be brought in the Tribunal and to which the statutory procedures apply. For example, if an employee is dismissed for redundancy on 1 April 2009, the statutory procedures would have applied to that dismissal and ongoing negotiations for a compromise agreement or an appeal could have the effect of extending the time limit for bringing a Tribunal claim to 30th September this year. Employers should not forget the transitional provisions (see our blog on these regulations) which apply to dismissals which straddle 6th April this year. Hence, where before 6 April, a step 1 letter was sent or the employer met with the employee to inform them about the possibility of a dismissal, the statutory procedures could apply and time limit could be extended in accordance with regulation 15(2).