Employment tribunal claimants can raise parallel proceedings for diligence on the dependence, judge rules

A judge in the Court of Session rejected the challenge after ruling that the claimant had an “effective remedy” in that she could raise a separate action to obtain diligence on the dependence.

Employment tribunal ruling

Lord Tyre heard that the petitioner “AA” sought judicial review of what she claimed to be the failure by the respondent, the Secretary of State for Business, to properly to implement in Scotland a right to arrest on the dependence of a community law-based claim to the employment tribunal.

The court was told that in September 2015 the petitioner commenced proceedings in the employment tribunal in Glasgow against her former employer and former line manager, alleging harassment on the grounds of sex, race and religion.

Following a hearing on the merits, the tribunal ruled in the petitioner’s favour and ordered here former employers, jointly and severally, to pay a sum of around £75,000 plus interest and expenses in respect of loss and damage, including psychological damage, suffered by her.

After the judgment was issued and before any payment had been received, an interim interdict was sought and obtained at Glasgow Sheriff Court after the petitioner’s legal adviser received information suggesting that the individuals in charge of her former employer were intending to take steps to close down the existing business and transfer its funds to another entity, with a view to defeating the award made to the petitioner by the tribunal.

By October 2016, however, the sum at credit of the employer’s bank account had fallen to about £4,000 and the petitioner had still not received any payment.

Arrestment on the dependence

The petitioner argued that she would not have found herself in the position of being unable to recover the sums awarded to her if she had been able to effect arrestment on the dependence against her former employer at the time of commencement of the tribunal proceedings, but an employment tribunal judge has no power to grant an order for diligence on the dependence.

The petitioner contended that the absence of such a power constituted a breach of the community law principles of “effectiveness and equivalence” and sought an award of compensation.

It was submitted that the employment tribunal had no power to order diligence on the dependence - or any equivalent protective order like a freezing injunction in England.

Nor, it was submitted, did any Scottish court have power to grant diligence on the dependence in relation to a discrimination claim in the employment tribunal and it was far from clear what the legal basis would be for a parallel action that was “manifestly incompetent”.

The wording of the relevant provisions of the Debtors (Scotland) Act 1987 gave no indication that a warrant to arrest could be granted with regard to a complaint in a different action and any proceedings raised in the sheriff court for the purpose of obtaining arrestment would be met by an unanswerable or at least strongly arguable plea of “lis alibi pendens”.

An award by the employment tribunal was enforceable in terms of the Employment Tribunals Act 1996 without any sheriff court involvement, so the hypothetical protective sheriff court proceedings would have “no subsequent purpose”, it was argued.

Breach of community law principles

Without a mechanism for interim protection, it was submitted that the principle of effectiveness was breached.

In any event, even if such a course of action could be taken, it would require parallel proceedings in two different fora and the obvious expense (including court fees) and inconvenience that this would involve was, in the absence of a satisfactory justification by the respondent, sufficient to render such a course “excessively difficult” and thus breach the principle of effectiveness.

Further, the existence of after-the-event remedies such as sequestration or liquidation of a former employer was irrelevant for present purposes, as they did not address the mischief of an employer who was deliberately dissipating the assets of a business to defeat a tribunal award.

Similarly, doing diligence after the tribunal had issued its decision would not assist a claimant in the petitioner’s position, it was submitted.

The issue was accordingly whether, by failing to make statutory provision for the granting of diligence on the dependence by an employment tribunal, the United Kingdom is in breach of its community law obligation to provide the petitioner with a remedy for harassment, in connection with her former employment, that is compliant with the principles of effectiveness and equivalence.

The Commission for Equality and Human Rights was granted leave to enter the petition procedure as intervener in support of the petitioner’s argument.

Effective remedy

Refusing the petition, the judge observed that it was competent to raise an action purely to obtain diligence on the dependence.

In a written opinion, Lord Tyre said: “Section 15A of the Debtors (Scotland) Act 1987, which confers upon inter alia the sheriff the power to grant warrant for diligence by arrestment or inhibition on the dependence is in general terms. Under section 15A(2), warrant for arrestment requires a conclusion for payment of a sum other than by way of expenses, but section 15C provides that it is competent to grant diligence on the dependence for a future or contingent debt. There is no requirement that the contingency be resolvable in the action in which the warrant is granted.”

He added that any argument by the defender that the action should be dismissed on the ground of lis alibi pendens would be excluded by the previous authority.

Lord Tyre continued: “The matter goes further, however, when one bears in mind that the arguments in these proceedings concern effective enforcement of community law rights. Just as Factortame (No 2) provided the foundation of the petitioner’s argument that national law must provide effective interim protection pending the establishment of the existence of a claimant’s community law right to compensation, so it is destructive of the argument that UK law currently fails to provide protection in relation to employment tribunal claims in Scotland. If it were the case that there was a rule of domestic Scots law that diligence on the dependence could not be sought in a Scottish court in order to protect such claims, then the principle of effectiveness would, according to Factortame, require that rule to be set aside.

“In reaching the above conclusion, I see no reason to distinguish between the powers of the sheriff court and the Court of Session respectively. The 1987 Act makes no difference between the two in conferring power to grant warrant for diligence on the dependence, and it follows that if, as I have held, it is competent for a Scottish court to grant protective diligence for employment tribunal proceedings, there is no basis for restricting that competency to the Court of Session.”

The judge also rejected the submission that the absence of a power to grant diligence in the employment tribunal and the need to raise protective proceedings in a separate action rendered the exercise of the petitioner’ s community law right “practically impossible” or “excessively difficult”.

He added: “There is no obligation on member states to provide an ideal solution: the obligation is merely to provide a solution that does not breach the principle of effectiveness. In my opinion the need to seek interim protection in a court, rather than in the tribunal, does not breach that principle. The additional expense and inconvenience occasioned by requiring to raise an action in the sheriff court which will proceed no further than an application for a warrant to arrest is likely to be modest. The cost of the application itself would be incurred regardless of the forum. The standard of practical impossibility or excessive difficulty is a high one, and is not in my opinion met by what would be required of a claimant who wished to obtain protective diligence, in an appropriate case, from a court.”