Mrs S Lightfoot-Webber v Lawcommercial Trading Ltd T/a (Lawcomm Solicitors) and Lawcommercial Services Ltd: 1402947/2022

EMPLOYMENT TRIBUNALS

Case No 1402947/2022

Between

Mrs S Lightfoot-WebberClaimant

Lawcommercial Trading Ltd T/a (Lawcomm Solicitors) and Lawcommercial Services LtdRespondent

Before

First Tier Tribunal Judge Volkmer sitting as Employment Judge

Mr Goodwin (instructed by Counsel) for claimant

In person for respondent

Date 22 March 2023

JUDGMENT

[1]The Claimant’s claim for unlawful deduction from wages is out of time and the Tribunal has no jurisdiction to hear the claim. It is dismissed.

[2]The Claimant’s claim for breach of contract in relation to the Q1 2022 bonus is upheld against the First Respondent.

[3]The Claimant’s claim of constructive unfair dismissal is upheld against the First Respondent.

[4]All claims against the Second Respondent are dismissed.

[5]Remedy is to be determined at a separate remedies hearing.

REASONS

[1]By a claim form presented on 10 September 2022 the Claimant claims constructive unfair dismissal, makes a claim for unlawful deduction from wages in relation to a bonus payment and makes a claim for a failure to provide a statement of terms of employment.

[2]The Respondents filed a response on 11 October 2022 resisting the Claim.

[3]The Claimant brings a claim against the First and Second Respondents on the basis that she is not sure which was the correct employer, in light of a purported transfer pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) during her employment. The Respondents operate as a law firm.

[4]The Claimant was employed from 26 September 2017 as a Family Law Executive, later being promoted to Head of Family Law. Her employment ended on 28 July 2022. The Respondents’ position is that the Claimant was initially employed by the Second Respondent and that her employment was transferred under TUPE from the Second Respondent to the First Respondent on 29 January 2021.

[5]I heard evidence under oath from the Claimant and, on behalf of the Respondents, Mrs Anita Dhariwal, Practice Administrator for the First Respondents, Mr David Alan Roper, Director of both Respondents and Ms Xanthe Fox-Noble, a self employed bookkeeper acting as the First Respondent’s Account Manager. I did not consider the Respondents’ witness evidence as it had been submitted prior to the reduction to the word count required as set out in paragraph 10 below, but only the evidence submitted after the reduction had taken place.

[6]I received a bundle of 263 paginated pages from the Respondents, a skeleton argument from the Claimant, a list of issues from the Claimant, and written submissions on preliminary matters from the Respondents. Preliminary matters

[7]There was no preliminary hearing in relation to this Claim. A number of preliminary issues were raised by the parties as follows:a. the Claimant seeking an adjournment with costs, or in the alternative that the Respondent’s witness evidence over the prescribed wordcount was struck out on the basis that, on the Claimant’s account, the Respondent had refused to provide the Claimant with the witness evidence until 16.49 on the day before the hearing and had exceeded the word limit of 5,000 words (the evidence running to 7,085 words). The Claimant pointing out that the Respondent holds itself out as being a law firm conducting litigation, including Employment Litigation;

b. the Claimant making an application to remove the document at page 232 of the Hearing Bundle on the basis that it was a hearsay statement governed by litigation privilege;

c. the Claimant making an application to amend the Claim to include a breach of contract claim. This is opposed by the Respondent;

d. the Respondent raising a jurisdictional issue in relation to the First Respondent on the basis that the Claimant had not obtained an ACAS Early Conciliation Certificate in respect of the First Respondent;

e. the Respondents raising a jurisdictional issue in relation to the First Respondent on the basis that the Claimant did not have sufficient service to pursue an unfair dismissal claim;

f. the Respondents raising a jurisdictional issue in relation to the Second Respondent on the basis that the entire Claim is not brought within three months of the transfer under TUPE of the Claimant’s employment to the First Respondent; and

g. the Respondents raising a jurisdictional issue in relation to the unlawful deduction from wages claim on the basis that, on their account, the last deduction was on 29 April 2022 and that the claim is therefore out of time.

[8]Following discussion with the Judge, the Respondent withdrew the following issuesa. 7(d) on the basis that there was an ACAS Early Conciliation Certificate in relation to the First Respondent, which had initially not been sent to the Respondents by HMCTS;

b. 7(e) on the basis they accepted that the Respondents’ position that a TUPE transfer had taken place would mean that the Claimant’s continuity of service would have transferred; and

c. 7(f) on the basis that the Respondents accepted that the issue of the identity of the employer related to liability rather than limitation. Adjournment and Witness Evidence

[9]The Claimant’s application for an adjournment was refused. It was clear that the Respondents providing the witness statement at such an unacceptably late stage had put significant pressure on the Claimant’s Counsel. However, Mr Goodwin had informed the Tribunal that he had been able to prepare for the cross examination of one of the Respondent’s witnesses, Mrs Dhariwal.

[10]I considered that it was not in the interests of the overriding objective to adjourn the hearing. Significant delay would not be in the interest of either party, all of the parties were in attendance and the Tribunal could hear the evidence of Mrs Dhariwal only on the afternoon of the first day of the hearing to rebalance the position. This, together with a requirement for the Respondents to reduce their witness evidence to the 5,000 word limit by 2pm on the first day of the hearing, would give the Claimant’s Counsel sufficient time to prepare to cross examine the other witnesses for the Respondents. I indicated that Mr Dhariwal would not be permitted to “adopt” documents such as the Respondents’ chronology as his witness statement, without the words in the chronology being counted towards the relevant word count. Removal of Document from the Bundle

[11]The Claimant’s application to remove the document at page 232 of the Hearing Bundle was allowed. The document in question was an email, from an individual whom the Respondents had asked to appear as a witness. In the email the prospective witness refused to give evidence on the basis that she did not wish to attend the Tribunal hearing and set out the witness’s opinions of the Claimant.

[12]The document was a communication between the Respondents and a third party for the purpose of obtaining information in connection with this litigation which was existing at the time that the email was created. This brought it within litigation privilege. The Respondents confirmed that they had not disclosed all documents covered by litigation privilege (such as emails with other witnesses), and sought to differentiate this document on the basis that it had been put on the writer’s personnel file.

[13]The Respondents should not be able to cherry pick documents covered by privilege, since this did not put the Claimant on an equal footing. This document was said to be prejudicial to the Claimant but the Claimant was not able to ascertain whether there were other documents which had not been disclosed which were helpful to her, because of the way in which this document had been disclosed in isolation. This was not in the interests of the overriding objective so I determined that the document should be removed from the Hearing Bundle and not considered by me in deciding liability. Application to amend the Claim

[14]In an application made on 17 February 2023, two working days before the hearing, the Claimant sought to amend her Claim with the addition of the following paragraph. In the alternative, I seek recovery of the non-payment of my Q1 2022 bonus as a breach of contract claim, pursuant to section 3 of the Employment Tribunals Act 1996. I rely on the facts as set out above in these particulars. Specifically:(1) There was a contractual obligation to pay that bonus;

(2) the Respondents breached that obligation by failing to pay it, in part or at all; and

(3) that breach was outstanding on the termination of my employment. This is a claim for damages for breach of contract (s3(2)(a)) or a sum due under a contract (s3(2)(b)).

[15]Cocking v Sandhurst (Stationers) Ltd and anor

[1974] ICR 650

NIRC laid down a general procedure for Tribunals to follow when deciding whether to allow amendments. The key principle is that in exercising their discretion, Tribunals must have regard to all the circumstances, in particular any injustice or hardship which would result from the amendment or a refusal to make it.

[16]Selkent Bus Company Ltd v Moore

[1996] ICR 836

EAT set out that the Tribunal must carry out a careful balancing exercise of all the relevant factors, having regard to the interests of justice and to the relative hardship that would be caused to the parties by granting or refusing the amendment. Factors identified in Selkent as being generally relevant to the assessment were: the nature of the amendment, the applicability of time limits and the timing and manner of the application.

[17]Vaughan v Modality Partnership

[2021] ICR 535

further clarifies that the key test for the Tribunal to consider is to assess where the balance of prejudice lies. The factors derived from Selkent are illustrative only and not definitive. The Tribunal therefore needs to ask itself what the real practical consequences of allowing or refusing the amendment would be.

[18]As set out in Abercrombie and others v Aga Rangemaster Ltd

[2014] ICR 209

the Tribunal must focus not on questions of formal classification but on the extent to which the new pleading is likely to involve substantially different areas of inquiry than the old. The greater the difference between the factual and legal issues raised by the new claim and by the old, the less likely it is that the amendment will be permitted.

[19]The substitution of other labels for facts already pleaded is an example of the kind of case where - other things being equal - amendment should readily be permitted, by contrast with the making of entirely new factual allegations which change the basis of the existing claim. Part of the original Claim in this case relates to the non-payment of the Claimant’s Q1 2022 bonus. The bonus claim is set out in detail in the original Claim, and is labelled as an unlawful deduction from wages. The amendment seeks to plead this in the alternative as a contractual claim, but does not seek to add any new pleaded facts. The failure to pay the Q1 2022 bonus is also relied on in relation to the constructive dismissal allegation made by the Claimant.

[20]The Respondents seek to argue that the amendment is “entirely different” to the pleaded Claim, saying that mitigation is relevant to a contractual claim and not to an unlawful deduction from wages claim, and would have led to a different focus for pleadings and witness evidence.

[21]Whilst mitigation is relevant to the breach of contract claim and not to the unlawful deduction from wages claim, an alleged failure to mitigate in relation to the relevant bonus had been specifically pleaded in the Respondent’s Grounds of Resistance at paragraph 26. There are no new areas of enquiry in relation to the amendment. The facts were already pleaded, and the issues have already been dealt with by the Respondents. In my finding this is a relabelling of facts which were already pleaded.

[22]It is well established that it is only necessary to consider the question of time limits where the proposed amendment in effect seeks to adduce a new complaint, as distinct from ‘relabelling’ the existing claim, see Foxtons Ltd v Ruwiel

UKEAT/0056/08

. If made separately now, the contract claim for the Q1 2022 bonus would be out of time. This is not a strong factor weighing in favour of rejecting the amendment because the amendment is merely a relabelling of a claim which has already been pleaded.

[23]The timing of the Claimant’s application was very late, the application to amend was made two working days before the substantive hearing. The Claimant says that this was because she had not had the benefit of legal advice before that. I take the lateness of the application into account in balancing of all of the circumstances.

[24]In weighing up all of the circumstances, I have considered what the real practical consequences of allowing or refusing the amendment would be. The Claimant says that there is no real consequence for the Respondents but that there is a real danger that the Claimant’s unlawful deductions claim for the Q1 2022 bonus may fail if it is found to be out of time. Therefore, the Claimant may lose her opportunity to recover the bonus if the amendment is not permintted. The Respondents’ position is that the prejudice weighs heavily on them because they have lost the opportunity to have focused witness evidence on mitigation, although there would be no difference in terms of documentary evidence. The Respondent submits that there is a clause in the Claimant’s employment contract allowing training expenses and practicing certificate expenses to be reclaimed by the Respondents from the Claimant and assert that they would lose the opportunity to counterclaim for these. The Respondent says that the Claimant would suffer very little prejudice as she could pursue the Q1 2022 bonus as a contractual claim in the County Court.

[25]In relation to the real practical consequences for the parties, I find that the Claimant would suffer a prejudice if the amendment was not allowed as there is a potential time bar in relation to the label of unlawful deduction from wages which would not be problematic in relation to the contractual claim. In my finding, if the amendment is permitted, there is no new area of enquiry, see paragraph 21 above. I do not accept that there is any real prejudice to the Respondents in relation to mitigation. A failure to mitigate is pleaded at paragraph 26 of the Grounds of Resistance and no new documentary evidence is relevant. The Respondents say that they have missed the chance to counterclaim for training expenses and practising certificate, but have shown no evidence of such potential claim – other than a relevant clause in the employment contract. In Vaughan it is made clear that parties must provide evidence of pleaded prejudice. Further, the point the Respondents make regarding County Court claims being a possible route for the Claimant, applies equally to the Respondents. It is open to the Respondents to pursue their own breach of contract claim in the County Court.

[26]Taking all of the circumstances into consideration I do allow the amendment. Jurisdictional Issue in relation to the unlawful deduction from wages claim

[27]I decided to deal with this with liability, since it relied on findings of fact in relation to the payment date. Issues

[28]The issues for the Tribunal to determine are as follows. Jurisdiction

[29]Did the Claimant bring her claim against the First and Second Respondents in time in respect of the unlawful deductions claim:a. What was the date of the last deduction?

b. Was the claim brought within three months of that date?

c. If not, was it not reasonably practicable to bring the claim in time?

d. If not, in what period should the claim have been brought in?

e. Was the claim brought within that period? Employment status

[30]Was the Claimant an employee of the First Respondent or the Second Respondent within the meaning of section 230 of the Employment Rights Act 1996 (“ERA 1996”)? a. The Respondent contends that the Claimant was employed by the First Respondent at the relevant time. Unfair Dismissal

[31]Was the Claimant dismissed? The Claimant alleges that she was constructively dismissed (s95(1)(c) ERA 1996). The Claimant alleges that the Respondents acted in fundamental breach of contract. She relies on the following alleged breaches.a. The Respondents’ failure to adhere to the April 2021 agreement as to the Claimant’s role and benefits, which the Claimant says was a breach of an express contractual agreement.

b. In the alternative to (a), such failure amounted to a breach by the Respondents of the implied duty of mutual trust and confidence.

c. The imposition of unilateral changes to her remuneration, which the Claimant says is a breach of the express terms of the bonus.

d. In the alternative to (c), imposition of such unilateral changes amounted to a breach by the Respondents of the implied duty of mutual trust and confidence.

e. The failure by the Respondents to pay the Claimant’s bonus, which the Claimant says is a breach of the express terms of the bonus.

f. In the alternative to (e), failing to pay the bonus amounted to a breach by the Respondents of the implied duty of mutual trust and confidence.

[32]The Tribunal will need to decide:a. whether the Respondent behaved in a way that was calculated or likely to destroy or seriously damage the trust and confidence between the claimant and the respondent; and

b. whether it had reasonable and proper cause for doing so.

[33]Did the Claimant resign because of the breach? The Tribunal will need to decide whether the breach was so serious that the claimant was entitled to treat the contract as being at an end.

[34]Did the Claimant delay before resigning and affirm the contract?

[35]In the event that there was a constructive dismissal, was it otherwise fair within the meaning of s. 98 (4) of the Act?

[36]Is there a chance that the Claimant would have been fairly dismissed anyway if a fair procedure had been followed, or for some other reason? (Polkey)

[37]If the Claimant was unfairly dismissed, did s/he cause or contribute to dismissal by blameworthy conduct? If so, would it be just and equitable to reduce her compensatory award? By what proportion? Unlawful Deductions

[38]Did the Q1, 2022 bonus amount to wages for the purpose of s13 ERA 1996? If so, to what bonus was the Claimant entitled?

[40]The Respondents admit no payment was made. It is not alleged by the Respondents that ss13(1)(a) or (b) ERA 1996 apply. Breach of Contract

[41]Did the Claimant have a contractual entitlement to receive a bonus? If so, on what basis was that bonus calculated?

[43]Did the Respondent’s failure to pay that bonus amount to a breach of contract?

[44]If so, was such breach outstanding at termination? Failure to Provide a Statement of Terms

[45]Did the Respondents fail to provide a s4 ERA 1996 compliant statement of changes when the Claimant’s role was changed on or around 12 April 2021?

[46]If so, was such failure still outstanding at the date this claim was presented?

[47]If so, what compensation should be awarded under s38 Employment Act 2002?

Findings of Fact

[48]The Claimant was employed by the Second Respondent as a Family Law Executive from 26 September 2017. On 12 October 2017 she signed a Statement of Terms and conditions which applied retrospectively to the date of starting her employment.

[49]In an email dated 21 November 2018 sent from Mrs Dhariwal to the Claimant, Mrs Dhariwal set out terms which were offered by the Second Respondent in response to an increase in the Claimant’s hours, these were to apply with effect from 1 January 2019. One of the terms related to a bonus, it stated the following: “Your target for the financial year shall be £48,000 net billing per annum. As a discretionary bonus, should you exceed your target in any quarter, you shall be entitled to a bonus equivalent to 33% of the net billing above your target. The bonus scheme is discretionary. It is based on current targets and resourcing levels. It is not payable in the event of breach of practice rules, justified complaints, breach of employment contract or staff handbook, submission of notice or a failure to comply with the firm’s quality standards. The above scheme is non-contractual and may be revoked or altered at any time upon immediate notice.”

[50]These terms were repeated, in an email from Mrs Dhariwal to the Claimant on 25 January 2019. When the Claimant queried the variability of the bonus, Mrs Dhariwal responded by email on the same day that “I’m not saying that your target will change monthly, I am saying that I will advise you and all fee earners at the end of each month what your “variance on target” is i.e. whether you hit target, fell short of target or exceeded target”.

[51]In November 2019, the Claimant resigned. In response, on 22 November 2019, Mrs Dhariwal sent an email to the Claimant asking her to stay and saying: “After some consideration, we would be able to offer you £32,5k plus the current bonus scheme. We would also agree to an assistant and continued funding for training.”. After a discussion between the parties, the Claimant sent an email to Mr and Mrs Dhariwal on 3 December 2019 saying “I hereby retract my resignation and confirm my acceptance of your below offer”. In cross examination, Mrs Dhariwal agreed that the bonus was considered to be “part of [the Claimant’s] package”.

[52]In the period between November 2019 and December 2020, two graduate assistants worked for the Claimant, and left the firm. In a review meeting in early January 2021, Mr Dhariwal raised with the Claimant that he considered there was an issue with the Claimant’s communication with one of her assistants and had “had a go” at one of them. The Claimant sent an email on 15 January 2021 asking for more details in relation to this comment. There was no response or further follow up by the Second Respondent.

[53]On 29 January 2021 Mrs Dhariwal sent an email to the Claimant stating the following: “Re: Notice of Transfer I am writing to advise you that your employment contract will be transferred from Lawcommercial Services Limited (“LSL”) to Lawcommercial Trading Limited trading as Lawcomm Solicitors (“LTL”) within the next 14 days. Payroll changes have already been implemented. This is because we are likely to cease the use of a service company for employing our personnel. Your employment will continue with LTL who are the regulated trading entity. Your contract of employment will automatically transfer to LSL to LTL pursuant to the TUPE regulations.”

[54]No consultation with the Claimant followed this, nor any confirmation of the transfer or the date of transfer. The Respondents’ position is that the Claimant’s employment transferred from the Second Respondent to the First Respondent on the same day as the email was sent, on 29 January 2021. The Claimant did not take a position on this, and it was not the subject of much evidence or argument. In my finding, based on the evidence of the Respondents’ there was a service provision change under TUPE 2006 which operated to bring in-house the employment of staff, transferring the service provision from the Second Respondent to the First Respondent. In my finding, based on the time period set out in the email dated 29 January 2021, the Claimant’s employment transferred from the Second Respondent to the First Respondent between 29 January 2021 and 12 February 2021, 14 days after the email.

[55]The First Respondent did not provide the Claimant with a written statement confirming the change to the identity of her employer.

[56]On 4 March 2021 the Claimant emailed Mr and Mrs Dhariwal explaining that she had been approached by another firm. After discussions between the parties, on 8 March 2021, the Claimant tendered her resignation by email.

[57]On 12 April 2021, Mr Dhariwal sent the Claimant an email with the heading “Final Offer (STC)” saying the following. “On condition that you withdraw your notice before 12 p.m. on 14 April 2021, we are willing to agree the following:• An increase in your salary to £40,000 gross per annum. You will appreciate that your target will also have to increase as a result of your increased salary.

• You will-be formally announced as Head of Family Law which shall be a standalone department to litigation.

• Please confirm whether you will be working full time hours?

• A new discretionary bonus scheme will be introduced by the new accounts manager. (Gerald Ingram unfortunately has had a stroke so we have to replace him).

• We shall recruit a legal secretary for you. In time, we shalt move you to opposite Billie McClelland. Billie is leaving shortly. Your new secretary will be sat where Billie sits. David Roper does not dictate but may need some assistance with printing and file maintenance from time to time. He now has a remote helper for wills and LPA's. I would expect his usage of the new legal secretary to be about 25%. …

• You have a parking space in line with all other HoD's.

• We are willing to spend between £250 to £500 per month on digital marketing when case number become low. However, you will have to agree to have a system for capturing and responding to marketing leads so none are wasted.

• We agree for you to be mentored by the new accounts manager.

• Subject to SRA clearance and ongoing performance under your contract of employment, you will be made a director upon your qualification. You are able to contribute to the firm's management via HoD meetings which shall recommence once our new accounts manager is in situ.”

[58]On 13 April 2021, the Claimant replied to the email saying “This is to confirm I accept your offer as detailed above.”. The terms set out in the email of 12 April 2021 became terms of the Claimant’s employment contract.

[59]On 20 April 2021 the Claimant followed up with a further email saying that she wanted to work full time hours with Mondays treated as flexi-time in order to enable her to offer evening and weekend appointments. Mrs Dhariwal responded on 21 April 2021 saying the following. “Great news that you have decided to stay! Full time hours are fine and yes Monday can be flexi to allow for you to meet clients at other times. This will be effective from 1st May 2021.”

[60]Mrs Dhariwal gave evidence that at this point the Claimant was considered to be a good employee, a valuable asset, and that the First Respondent wanted her to stay.

[61]Following this, the Claimant received the increased pay, a new job title of Head of Family. The anticipated new accounts manager did not start work with the First Respondent and as a result there was no new bonus scheme or mentoring provided. The Claimant continued to receive bonuses in accordance with the bonus scheme in place prior to this offer being made and accepted.

[62]The Claimant also began to use an assistant, who also worked with Mr Roper. At the end of September, this individual raised concerns with Mrs Dhariwal, which Mrs Dhariwal passed on to the Claimant. These concerns related to the type of work, some of which she did not wish to do, saying she was not being given adequate training and instructions, as well as raising concerns with social distancing. Discussions took place between the Claimant and Mrs Dhariwal regarding how to deal with this, and it appeared from the emails that Mrs Dhariwal was happy with the Claimant’s approach.

[63]In July 2021, the Claimant obtained her CiLEx fellowship. The quarterly review document dated 8 September 2021 did not indicate any concerns with her performance.

[64]Between January 2019 and December 2021, the Claimant received a bonus for exceeding billing targets in 6 out of 12 quarters. This finding is based on the evidence of Mrs Dhariwal.

[65]On 7 February 2022, Mrs Dhariwal sent the Claimant an email saying “I hope you had a good weekend. Are you around on Wednesday at 11am to have a meeting with Xanthe and I regarding your billing please? We need to discuss the way that your billing and forecasts are being reported. As an example, In January you had 20K worth of billing which gets put forward onto the reports but accounts have actually only received £6362 of that. This means that we are paying VAT on 20K but have only received a proportion of that amount. Your forecasts for February are 30k which is again being used as a figure on the cashflow but is providing an inaccurate picture. This will also affect your bonus scheme as we should not be paying bonus on money that we have not received.”

[66]There followed a meeting between the Claimant and Ms Fox-Noble on 14 February 2022, in which the Claimant’s billing methods were discussed and it was agreed that a fee note should be created in the first instance rather than an invoice to deal with concerns regarding VAT liabilities. The Claimant then queried how her bonus would be affected in an email dated 15 February 2022. On 3 March 2022, Mrs Dhariwal responded in an email to the Claimant saying “Xanthe wants your bonus to now be paid on billing received. Hopefully you understand the requirement for this.”.

[67]The Claimant responded by email on 4 March 2022 challenging the change to her bonus structure and making clear that she was unhappy with this. Mrs Dhariwal responded on the same day saying “Bonus structures are as I’m sure you are aware discretionary, and as per your bonus letter can be altered with immediate effect…I am happy to keep this quarter bonus scheme in its current form due to the late notice, but would like to propose that the changes are made from 1st April onward. Invoices raised in March should not exceed the target of £6.71K… The bonus scheme remains discretionary”.

[68]The Claimant replied with an email on 9 March 2022, making clear that she did not agree that the bonus was discretionary, including by saying that it had been established by custom and practice. She referred to not having been made a director despite achieving the CiLEx qualification and also referred to the failure by the Respondent to provide mentoring. She went on to say that the change to the bonus structure was a breach of the implied term of trust and confidence and a breach of contract.

[69]In an email on 14 April 2022, responding to various points in the Claimant’s email, Mrs Dhariwal said “For one reason or another the three Assistants did not work out. You then decided that you would be better working on your own due to the time and effort required to train another person. You were given a new desk albeit not your own office. This is because there is no separate office and It was that best that could be done in the circumstances…..2. I personally have never said you are not a team player. I am not sure where this has come from. I have also never criticised you for training and issues with the Assistants. Any issues have been discussed and improvements suggested. Everybody, no matter what their level should be in a position to learn, develop and be better. That applies to us all as nobody is perfect by any means. Any discussions that have been had with you would be on this basis.”. This email demonstrates that at the time, Mrs Dhariwal’s view, contrary to her witness evidence, is that she was not concerned about the Claimant’s interactions with other staff members. I prefer this evidence to that given after the fact in Mrs Dhariwal’s witness evidence.

[70]Later in the email of 14 April 2022, in relation to the bonus Mrs Dhariwal stated that the bonus was non-contractual, discretionary and could be withdrawn or changed at any time, she denied that a breach of contract had occurred.

[71]Mrs Dhariwal emailed the Claimant on 25 April saying that in line with communications at the beginning of March, £6,700 of what had been billed in March would be eligible for the bonus, the rest would only be eligible on receipt of payment. The Claimant objected to this by email on 26 April 2022. In relation to the Q1 bonus, the Claimant said that she calculated that she was owed a total of £7,035.75 based on 33% of her billing over target that quarter. Mrs Dhariwal replied on 27 April 2022 suggesting that the Claimant meet with Mr Dhariwal, saying that payment of the bonus would be delayed until the matter had been resolved. The First Respondent did not pay any bonus sum to the Claimant on 29 April 2022, the payment date for the Q1 2022 bonus.

[72]There was a meeting on 10 May 2022, in which the Claimant gave Mr Dhariwal a note, which the Tribunal has not seen a copy of. Mr Dhariwal produced a memorandum dated 20 May 2022 in response. This stated that the Claimant’s note said that she had been made an offer of alternative employment.

[73]The memorandum also referred to the discretionary bonus, saying that it was not contractual and could be revoked or altered at any time. Mr Dhariwal stated that the Claimant was seeking £6,184.75 but that the First Respondent’s position was that only £3,026.25 should be paid, reflecting the cap of £6,700 of billing for March. Mr Dhariwal went on to say that he had concerns regarding the Claimant offering clients payment plans, saying that the position was unsatisfactory.

[74]The memorandum also said, in terms, that the Claimant needed to change her approach to dealing with staff, and would need a detailed review of her performance, before she would be made director. In the final paragraph Mr Dhariwal stated “You are a valued employee….I would like to seek a remedy….in order that you can continue to work effectively.”

[75]On 9 June 2022 the Claimant resigned, saying that she considered herself to be constructively dismissed, referring to(i) the failure to make her a director;

(ii) breach of trust and confidence;

(iii) the change to her bonus structure without consultation; and

(iv) criticism in an email which was also addressed to the firm’s IT consultant. The Claimant again asserted that she was owed £7,035.75 based on 33% of the figure over target. The Claimant gave 6 weeks’ notice of the termination of her employment. Her last working day was on 15 July 2022 and her employment ended on 28 July 2022.

[76]The First Respondent’s conduct was reason for the Claimant’s resignation. This finding is based on the Claimant’s witness evidence. The Tribunal also accepts the Claimant’s evidence that she sought other work because of her intention to resign in response to that conduct and not the other way around. Claims Against the Second Respondent

[77]The Claimant’s employment had transferred under TUPE to the First Respondent, therefore all claims against the Second Respondent fail. Q1 2022 Bonus: The Law

[78]I have been referred to Noble Enterprises Ltd v Lieberum [1998] 6WLUK420. There, although the employer had a discretion whether to operate the bonus scheme from year to year – once the bonus scheme had begun, the discretion was limited. It was made clear that if an employer wished to deprive an employee of the benefit of a bonus payment which he had earned through extra effort, then it was incumbent on the employer to make such a term clear in advance of the work being done.

[79]Khatri v Cooperatieve Centrale Raiffeisen-Boerenleenbank

[2010] IRLR 715

is a Court of Appeal case relating to a formula based bonus arrangement. The bonus clause included the following wording: “The Bank maintains the right to review or remove this formula linked bonus arrangement at any time.”. Lord Justice Jacob was clear that the question of bonus entitlement was purely one of construction: “It falls to be decided by how the words would be understood by a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation they were in at the time of the contract. The background includes anything which would have affected the way in which the language of the document would have been understood by the reasonable man.”

[80]The language of entitlement and the circumstances, including that the bonus was a means of enticing the claimant in that case to stay with the employer, where taken into account when interpreting the bonus clause and making a finding that it was contractual.

[81]In Small & Ors v Boots Company plc and another

[2009] IRLR 328

it was found that all of the relevant circumstances should be taken into account, including the employer’s practice of making payments over many years, in deciding whether the discretion in the documentation was to be construed as having contractual content. Further, discretion could be construed to apply to particular elements or to the bonus in its entirety. Q1 2022 Bonus: Applying the Law to the Facts

[82]The express terms of the bonus scheme are as follows: “As a discretionary bonus, should you exceed your target in any quarter, you shall be entitled to a bonus equivalent to 33% of the net billing above your target. The bonus scheme is discretionary. It is based on current targets and resourcing levels. It is not payable in the event of breach of practice rules, justified complaints, breach of employment contract or staff handbook, submission of notice or a failure to comply with the firm’s quality standards. The above scheme is non-contractual and may be revoked or altered at any time upon immediate notice.

[83]The relevant background on re-incorporation of the bonus into the Claimant’s contract in December 2019 was that:a. the use of the language of entitlement “you shall be entitled to a bonus”;

b. the calculation was formulaic and had been applied during 2019 in a consistent, straightforward, mathematical manner;

c. the bonus was intended to incentivise the Claimant to generate more billing; and

d. the bonus had been put forward as part of the Claimant’s improved “package” to retain her when she was planning to leave for a competitor, and relied on by her in withdrawing her resignation as consideration in return.

[84]Taking the relevant background into account, and upon reasonable construction, the bonus scheme, did have contractual effect. The wording of the bonus clause stated at the end that the scheme was “non-contractual and may be revoked or altered at any time upon immediate notice”. I find that this wording entitled the First Respondent to alter the calculation of, or indeed revoke, the scheme in advance of each quarter, without giving notice. However, a reasonable person would not understand this wording to mean that where an employee had begun work for a relevant quarter, the bonus could be altered or revoked part-way through that quarter. Once the relevant quarter had begun, and the employee had begun work in reliance on it being in place, its payment could only be withheld in circumstances where there had been a “breach of practice rules, justified complaints, breach of employment contract or staff handbook, submission of notice or a failure to comply with the firm’s quality standards”. Whilst the First Defendant referred to emails relating to alleged complaints, the Grounds of Resistance and submissions did not seek to rely on this carve out.

[85]As is clear from Noble, if the First Respondent had wished to deprive an employee of the benefit of a bonus payment earned through extra effort, then it was incumbent on them to make such a term clear in advance of the work (or part of the work) being done. In line with Khatri if the First Respondent “decide[s] to reward their employees by means of purely discretionary bonuses then they should say so openly and not seek to dress up such a bonus with the language of entitlement qualified by a slight phrase which does not make it absolutely clear that there is in fact no entitlement at all.”

[86]It was not, therefore, open to the First Respondent to seek to change the basis on which the Claimant’s bonus for Q1 2022 was calculated, in February 2022. Any change for Q1 2022 had to be notified to the Claimant by 31 December 2021. Accordingly, in my finding the Claimant was entitled to have had her bonus calculated by reference to 33% of billing over target for Q1 2022. In my finding, this sum equated to £7,035.75 based on the evidence and calculation of the Claimant. The First Defendant did not put forward any evidence which would indicate that a different calculation was correct. The relevant payment date was 29 April 2022.

[87]The First Defendant’s actions seeking to unilaterally amend the Q1 2022 were in breach of contract. Whilst there was some discussion between the parties after Mrs Dhariwal’s email on 3 March 2022 indicating the bonus would be calculated based on receipts, there was no sufficiently clear statement of intention to breach the contract before 25 April 2022. The email of 25 April 2022 was the first clear statement of the First Respondent’s intention not to pay the Claimant the relevant bonus. This was an anticipatory breach of contract. The First Respondent then did not make the bonus payment on 29 April 2022, in breach of contract.

[88]The Claimant seeks to argue that throughout the discussions, each time a payment was offered but not paid, this was an occasion on which the payment was due for unlawful deductions purposes. I find that since there was no agreement between the parties on this matter which operated to vary the contractual due date of the bonus, the only date on which the payment was due was the 29 April 2022. This breach was still outstanding at the date on which the Claimant’s employment ended on 28 July 2022, and at the date of the hearing no bonus payment had been made. The Tribunal’s Jurisdiction in relation to the Unlawful Deduction from Wages Claim

[89]The Respondents raise a jurisdictional issue in relation to the unlawful deduction from wages claim for the Q1 2022 bonus on the basis that, on their account, the last deduction was on 29 April 2022 and that the claim is therefore out of time.

[90]The Claimant’s position is that there were ongoing discussions about the payment of the bonus, and various promises to pay it were made. Therefore, the “occasion” on which the bonus was due, and therefore a deduction made, was each monthly payroll and again with the Claimant’s final payslip or alternatively each time a payment was offered but not paid. Therefore, the Claimant says, the claim is in time. In the alternative, the Claimant says that it was not reasonably practicable to bring the claim in time, as doing so would damage the employment relationship.

[91]Since the position in relation to whether the primary limitation period has expired is a question which depends on my findings of fact, I decided to deal with the issue of jurisdiction together with my decision on liability.

[92]Under section 23 ERA 1996, a Tribunal “shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with (a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made”. Pursuant to section 207A ERA 1996, this is extended by the ACAS conciliation period.

[93]In my findings, set out above at paragraph 88, I determined that the bonus was due on 29 April 2022. It is common ground between the parties that this means that the unlawful deduction from wages claim is out of time.

[94]Under section 23(4) ERA 1996 where the employment tribunal is satisfied that it was not reasonably practicable for a complaint under this section to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is presented within such further period as the tribunal considers reasonable. The burden of proof is on the Claimant to prove that it was not reasonably practicable to bring the claim within the primary limitation period. This was not addressed in the Claimant’s witness statement. In the circumstances, I find that it was reasonably practicable for her to have brought the claim.

[95]The Tribunal has no jurisdiction to hear the unlawful deduction from wages claim and it is therefore dismissed. Constructive Dismissal: The Law

[96]Under section 95(1)(c) of ERA 1996, an employee is dismissed if they terminate the contract under which they are employed (with or without notice) in circumstances in which they are entitled to terminate it without notice by reason of the employer’s conduct. This is often referred to as a “constructive dismissal”.

[97]If the claimant’s resignation can be construed to be a dismissal then the issue of the fairness or otherwise of that dismissal is governed by section 98 (4) of ERA 1996 which provides “…. the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and –

(b) shall be determined in accordance with equity and the substantial merits of the case”.

[98]The leading authority in relation to constructive dismissal and the applicable test for a claim of constructive unfair dismissal was provided by Lord Denning MR in Western Excavating (ECC) Limited v Sharp

[1978] IRLR 27

: “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment; or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract; then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of his employer’s conduct. He is constructively dismissed. The employee is entitled in these circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract.”

[99]The Tribunal must therefore establish that there is a relevant contractual term and decide if it has been breached. If there has been a breach of contract, the question is then whether the breach is fundamental, in other words whether it repudiated the whole contract. In Tullett Prebon PLC and Ors v BGC Brokers LP and Ors Maurice Kay LJ endorsed the following legal test at paragraph 20: “… whether, looking at all the circumstances objectively, that is from the perspective of a reasonable person in the position of the innocent party, the contract breaker has clearly shown an intention to abandon and altogether refuse to perform the contract.”

[100]In Star Newspapers Ltd v Jordan EAT 344/93 it was found that there was an implied term that the employer, when reducing the geographical area in relation to which the employee would receive commission, would come to some agreement with the Applicant that she would not have a reduction in her finances. It was found to be a breach of that implied term when that the employers paid no attention whatsoever to her financial situation in making the relevant change. The employee was entitled to treat a substantial reduction in the income as a fundamental breach of contract.

[101]In Cantor Fitzgerald International v Callaghan and ors

1999 ICR 639

, CA, the Court of Appeal found that where an employer unilaterally reduces his employee's pay, or diminishes the value of their salary package, the entire foundation of the contract of employment is undermined. A denial by the employer of his obligation to pay the agreed salary or wage, or a determined resolution not to comply with his contractual obligations in relation to pay and remuneration, will normally be regarded as repudiatory regardless of the amount involved.

[102]As set out in Omilaju v Waltham Forest London Borough Council

[2004] EWCA Civ 1493

it is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. This is known as the implied term of trust and confident. The test of whether there has been a breach of the implied term of trust and confidence is objective, and any breach of it will amount to a fundamental breach. That is because the essence of the breach of this implied term is that it is calculated or likely to destroy or seriously damage the relationship.

[103]If a fundamental breach of contract has been established, the employee may accept the breach and resign, or affirm the contract. If the employee resigns, in order to amount to constructive dismissal, such resignation must be caused by the breach of contract in question.

[104]Jones v F Sirl and Son (Furnishers) Ltd

1997 IRLR 493

, EAT, in order to decide whether an employee has left in consequence of fundamental breach, the tribunal must look to see whether the employer's repudiatory breach was the effective cause of the resignation. There may have been concurrent causes operating on the mind of an employee whose employer had committed fundamental breaches of contract (including, in this case the offer of an alternative job). Where there was more than one cause operating on the mind of an employee it is the task of the tribunal to determine whether the employer's actions were the effective cause of the resignation.

[105]The Court of Appeal in Meikle v Nottinghamshire County Council

2005 ICR 1

, CA made clear that the crucial question is whether the repudiatory breach “played a part in the dismissal” and was “an” effective cause of resignation, rather than being “the” effective cause. It need not be the predominant, principal, major or main cause for the resignation. Constructive Dismissal: Applying the Law to the Facts

[106]I have made a finding that the Respondent breached a clause of the Claimant’s contract regarding the payment of the Q1 2022 bonus. This alone was sufficient to constitute a fundamental breach of the Claimant’s employment contract, Cantor Fitzgerald applied.

[107]The parties had agreed a term of the Claimant’s contract in relation to directorship as follows. “Subject to SRA clearance and ongoing performance under your contract of employment, you will be made a director upon your qualification.”

[108]The only qualification to the contractual obligation to make the Claimant a director of the firm, is “ongoing performance under your contract of employment”. The Claimant qualified in July 2021. The quarterly review document dated 8 September 2021 did not indicate any concerns with her performance. Therefore, in my finding the performance element of the clause was met. The Respondent conceded that the SRA element was also met. Nevertheless, the Claimant was not made a director upon qualification.

[109]The First Respondent’s attempts to cast the Claimant’s people management skills in a bad light from Mr Dhariwal’s memorandum of 20 May 2022 onwards, are not borne out by the contemporaneous evidence, and in two of the three examples, predate the incorporation of the term regarding the directorship. In any case this is not relevant to the operation of the clause itself. If concerns regarding people management were relevant to performance of the Claimant’s contract, as understood by the First Respondent, they would have been raised in 8 September 2021 review. They were not. Attempts to raise these concerns later are not credible. It is not the Tribunal’s role to assist the First Respondent to escape a bad bargain. It cannot now add further caveats to the contractual obligation to make the Claimant a director on qualification.

[110]The First Respondent breached the Claimant’s contract in that she was not made a director on qualification. In my finding, this should have taken place within a reasonable period after the Claimant’s qualification, with the First Respondent taking active steps to make the Claimant a director by the end of September 2021. This breach was ongoing – despite not taking any active steps to make the Claimant a director, there were ongoing discussions in which Mr Dhariwal indicated that he was still willing to make the Claimant a director. On 20 May 2022, in his memorandum, Mr Dhariwal stated that the Claimant would not be made director unless she changed her approach to dealing with staff, and a detailed performance review was satisfactory. This crystallised the breach. This breach went to the heart of the contract with the Claimant and constituted a fundamental breach of contract.

[111]I do not go on to consider the alleged breach of the implied duty of trust and confidence given the two breaches of express terms, which have been found to be fundamental breaches, outlined above.

[112]The Claimant resigned on 9 June 2022 because of the First Respondent’s conduct. The First Respondent argued that the Claimant’s job offer pre-dated the breach because a job offer had been received by 20 May 2022. However, the date of one of the relevant breaches was 29 April 2022 when the First Respondent did not make the payment of the Q1 2022 bonus on its due date, therefore I do not accept this argument. Indeed Mrs Dhariwal said in oral evidence that she thought the Claimant had resigned because of the bonus issue.

[113]The Respondent referred alleged that the Claimant had affirmed the contract in the Grounds of Resistance but did not particularise the point. I have nevertheless considered it. Given the Claimant’s active protests in relation to the breaches, the delay between the breaches on 29 April 2022 and 20 May 2022, and the Claimant’s resignation on 9 June 2022 is not sufficient to constitute an affirmation of the contract. A resignation on notice is envisaged by section 95(1)(c) of ERA 1996. The offer to work an additional two weeks (rather than using annual leave) in circumstances where the Claimant has been so clear about her objections to her treatment, and has already resigned in response to it, cannot in my finding imply an affirmation of the contract.

[114]Taking all of the above into account, the Claimant was constructively dismissed by the First Respondent. Unfair dismissal

[115]In order to establish that the dismissal was fair, the First Respondent must show that there was a potentially valid reason for dismissal within the terms of section 98(1) and (2) ERA 1996. The First Respondent has pleaded misconduct, which is not particularised in the Grounds of Resistance. In submissions it was said to refer to the Claimant not being in the office, other issues raised in the 20 May 2022 memorandum, and breach of confidentiality obligations in discussing the bonus dispute with other staff members.

[116]The First Respondent’s submission is that the reason for the dismissal was misconduct, a potentially fair reason. This is not credible. Much of Mr Roper’s statement on this point is couched in the language of second hand information “I have been advised”. In the memorandum of 20 May 2022, Mr Dhariwal states “You are a valued employee….I would like to seek a remedy….in order that you can continue to work effectively.” In my finding, the First Respondent did not intend to dismiss the Claimant. The reason for the dismissal cannot therefore credibly be said to be misconduct. The Respondent now seeks to amplify largely historic matters, in relation to which no disciplinary steps were ever taken or intended to be taken, in order to seek to construct a misconduct argument.

[117]In the absence of a potentially fair reason for dismissal, the dismissal was unfair.

[118]Potential reductions to the compensatory award are dealt with in section 123 of the Act. Section 123(6) provides: "where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

[119]If a finding of unfair dismissal is made as a result of an unfair procedure, then the tribunal should consider the likelihood that the employee would have been dismissed in any case had a fair procedure been followed. Considering Polkey v A E Dayton Services Ltd

[1988] ICR 142

HL and applying Software 2000 Ltd v Andrews and ors

2007 ICR 825

, EAT the Tribunal must assess the loss flowing from that dismissal, which will normally involve an assessment of how long the employee would have been employed but for the dismissal.

[120]It would not be appropriate to make a Polkey reduction in this case. The misconduct argument made by the First Respondent is unconvincing and consequently there is no basis, which would have justified a fair dismissal. I find no contributory fault on the part of the Claimant. Requirement to Provide Written Particulars

[121]Section s 4(6)(b) ERA 1996, provides that where, the identity of the employer is changed in circumstances in which the continuity of the employee's period of employment is not broken, and there is no change in any of the other particulars which must be contained within the written particulars, then the new employer must give a statement noting the change of employer (section 1(3)(a); s4(6)(b) ERA 1996). This applies in relation to the TUPE transfer of the Claimant from the First Respondent to the Second Respondent. Such a statement must also specify the date on which the employee’s period of continuous employment began (section 1(3)(b); s4(6)(b) ERA 1996).

[122]The First Respondent did not comply with the above obligation to provide a written statement of change after the relevant TUPE transfer, see paragraph 55 above.

[123]In relation to the Claimant’s claims that there should have also a statement of change in relation to the rate of remuneration post-April 2021, changes to benefits, the change of job title as Head of Family Law and details of training entitlements, in my finding, these changes were provided to the Claimant in writing with sufficient particularity – albeit by email, on 12 April 2021.

Conclusions

[124]The Claimant was initially employed by the Second Respondent, and her employment transferred under TUPE to the First Respondent between 29 January 2021 and 12 February 2021, it is unclear exactly when.

[125]As a result of the TUPE transfer, the Second Respondent was not the Claimant’s employer at the time the claims arose, so the claims against the Second Respondent are dismissed.

[126]Following the transfer, the First Respondent did not provide a compliant statement of update of terms as required under sections 1 and 4 of ERA 1996.

[127]The Claimant brought a contractual claim for a quarterly bonus in relation to the first quarter of 2022. The Claimant alleged that the bonus was contractual. The First Respondent argued that it was discretionary and could be withdrawn or amended at any time. I determined that there was an element of discretion open to the First Respondent, but once the quarter had begun, the contractual wording did not permit the First Respondent to amend or withdraw the bonus part way through the quarter. In this case, the First Respondent had attempted to make changes in February 2022, after the quarter had begun. I found that the Claimant was therefore contractually entitled to the Q1 2022 bonus, which was due on 29 April 2022.

[128]I found that the Tribunal did not have jurisdiction to consider the Claimant’s unlawful deduction from wages claim in relation to the Q1 2022 bonus, because it was reasonably practicable for her to have brought the Claim in the limitation period, and she did not.

[129]The First Respondent did not pay the Claimant anything in relation to the Q1 2022 bonus. This was a fundamental breach of contract. The breach was outstanding on the termination of the Claimant’s employment.

[130]The Claimant’s contract contained an express term that the Claimant would be made a director on obtaining her CiLEX qualification. The Claimant achieved this in July 2021, I have made a finding that the caveat regarding performance was not made out, and consequently the First Respondent was under a contractual obligation to make the Claimant a director of the firm. In my finding, this breach was crystallised on 20 May 2022 when the First Respondent made clear that it would not comply with this express contractual term. This was a fundamental breach of contract.

[131]The Claimant resigned on 9 June 2022 and her employment ended on 28 July 2022. I found that the fundamental breaches by the First Respondent were the effective cause of the resignation, even though the Claimant did hold a job offer by the time of her resignation. She had sought other work as a result of the First Respondent’s conduct. There was no affirmation of the contract by the Claimant.

[132]Based on these findings, the Claimant was constructively dismissed.

[133]The First Respondent argued that the dismissal was fair, relying on misconduct as a potentially fair reason. I found that the First Respondent had not intended to dismiss the Claimant, and the argument regarding misconduct was not credible. Based on these findings, the Claimant was unfairly dismissed.

Remedy

[134]Remedy shall be considered at a separate remedies hearing. First Tier Tribunal Judge Volkmer sitting as

Remedy

[1]By a claim form presented on 10 September 2022 the Claimant claimed constructive unfair dismissal, made a claim for unlawful deduction from wages in relation to a bonus payment and a claim for a failure to provide a statement of terms of employment. The claim was heard on 21 and 22 February 2023.

[2]In a reserved judgement sent to the parties on 30 March 2023, I determined as follows:a. the Claimant’s claim for unlawful deduction from wages was out of time and the Tribunal had no jurisdiction to hear the claim. It was dismissed;

b. the Claimant’s claims for breach of contract in relation to the Q1 2022 bonus and constructive unfair dismissal were upheld against the First Respondent; and

c. all claims against the Second Respondent were dismissed.

[3]The First Respondent now applies for a reconsideration of that Judgment. The grounds are set out in the First Respondent’s email of 13 April 2023. In summary, the grounds are that:a. the Tribunal did not take into account that the payment of the Q1 2022 bonus could be withheld in circumstances where there had been a breach of practice rules, justified complaints, breach of employment contract or staff handbook, submission of notice or a failure to comply with the firm’s quality standards. The Tribunal should have taken account of evidence that the Claimants breaching the firm’s rules in the office manual on submission of bills, justified complaints from clients resulting in amounts being written off and the Claimant permitting excessive debtors on her files. It is not accepted that this point was not made in submissions; and

b. the Tribunal did not consider that the e-mail offering the Claimant a directorship was “subject to contract”.

[4]Schedule 1 of The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 contains the Employment Tribunal Rules of Procedure 2013 (“the Rules”). Under Rule 70 of the Rules, the Employment Tribunal may, either on its own initiative or on the application of a party, reconsider a decision where it is necessary in the interests of justice to do so. On reconsideration, the decision may be confirmed, varied or revoked.

[5]Rule 71 provides that an application for reconsideration under Rule 70 must be made within 14 days of the date on which the decision (or, if later, the written reasons) were sent to the parties.

[6]The process by which the Tribunal considers an application for reconsideration is set out in Rule 72. Where the Judge considers that there is no reasonable prospect of the original decision being varied or revoked, the application shall be refused. Otherwise, the Tribunal shall send a notice to the parties setting out a time limit for any response to the application by the other parties, and seeking the views of the parties on whether the application can be determined without a hearing.

[7]Rules 71 and 72 give the Tribunal a broad discretion to determine whether reconsideration of a decision is appropriate. Guidance for Tribunals on how to approach applications for reconsideration was given by Simler P in the case of Liddington v 2Gether NHS Foundation Trust

UKEAT/0002/16/DA

. Paragraphs 34 and 35 provide as follows: “34. […] a request for reconsideration is not an opportunity for a party to seek to re-litigate matters that have already been litigated, or to reargue matters in a different way or adopting points previously omitted. There is an underlying public policy principle in all judicial proceedings that there should be finality in litigation, and reconsideration applications are a limited exception to that rule. They are not a means by which to have a second bite at the cherry, nor are they intended to provide parties with the opportunity of a rehearing at which the same evidence and the same arguments can be rehearsed but with different emphasis or additional evidence that was previously available being tendered. Tribunals have a wide discretion whether or not to order reconsideration. 35. Where […] a matter has been fully ventilated and properly argued, and in the absence of any identifiable administrative error or event occurring after the hearing that requires a reconsideration in the interests of justice, any asserted error of law is to be corrected on appeal and not through the back door by way of a reconsideration application.”

[8]The First Respondent’s application was received within the relevant time limit. I therefore consider it under Rule 72.

[9]In relation to the Q1 2022 bonus, the First Respondent pleaded in its Grounds of Resistance at paragraphs 20 to 26 that the bonus was not payable because it was discretionary in nature and the basis of calculation had been amended so as to relate to a “cash received” basis, rather than upon an “invoices delivered” basis. The matters now raised at reconsideration stage were not referred as part of the First Respondent’s pleadings in relation to the Q1 2022 bonus. There was no application to amend the Grounds of Resistance to include these points.

[10]It is accepted that these points regarding the Q1 2022 were referred to in submissions, and that this was incorrectly recorded in the judgment, but the Claimant’s representative objected at the time due to the fact that these matters were not referred to in the Grounds of Resistance. Having considered the reconsideration request, since these points were not pleaded by the First Respondent, and the First Respondent had not sought to amend those pleadings, the Tribunal would not have reached a different conclusion.

[11]At paragraphs 57 and 58 of the judgment I made a finding of fact that the offer of directorship set out in Mr Dhariwal’s email dated 12 April 2021 with the heading “Final Offer (STC)” became a term of the Claimant’s contract, once she sent an email accepting it. This also had the effect of withdrawing her previous resignation. The Tribunal, in making this finding of fact, took into account the fact that the email was headed “STC”, meaning “subject to contract”. It is therefore not appropriate to reconsider a factor which has already been taken into account and determined by the Tribunal.

[12]Having carefully considered the First Respondent’s application, and bearing in mind the importance of finality in litigation and the interests of both parties, I am not satisfied that there is any reasonable prospect of the Judgment or any part of it being varied or revoked. The application for reconsideration is therefore refused.

Remedy

BACKGROUND

[1]By a claim form presented on 10 September 2022 the Claimant claimed constructive unfair dismissal, a bonus payment and a failure to provide a statement of terms of employment. A liabilities hearing took place before me by video on 21 and 22 February 2023. By a reserved judgment dated 22 March 2023, and sent to the parties on 30 March 2023, the Claimant’s claims were upheld against the First Respondent. All claims against the Second Respondent were dismissed. The First Respondent is described simply as the Respondent in this judgment.

[2]At paragraph 86 of the liabilities judgment, I made a finding that a bonus payment of £7,035.75 should have been paid to the Claimant, on the 29 April 2022.

[3]The Claimant and Respondent each submitted written submissions in relation to remedies. I was also referred to a Remedies Bundle of 116 paginated pages. The Liabilities Bundle of 256 paginated pages was also referenced. Submissions were made in the hearing in relation to the Claimant’s costs application, but it was agreed with the parties that this would be dealt with after the remedies judgment had been given as the Claimant wished to make reference to correspondence which was without prejudice save as to costs. Issues

[4]The issues for the Tribunal to determine are as follows. 4.1. What basic award is payable to the Claimant, if any? 4.2. Would it be just and equitable to reduce the basic award because of any conduct of the Claimant before the dismissal? If so, to what extent? 4.3. If there is a compensatory award, how much should it be? The Tribunal will decide: 4.3.1. What financial losses has the dismissal caused the Claimant? 4.3.2. Has the Claimant taken reasonable steps to replace their lost earnings, for example by looking for another job? 4.3.3. If not, for what period of loss should the Claimant be compensated? 4.4. Does the statutory cap of fifty-two weeks’ pay or £93,878 apply? 4.5. How much should be awarded in relation to the Claimant’s contract claim? The relevant legal principles Basic award

[5]Where the award sought in a successful unfair dismissal claim is compensation, section 118 Employment Rights Act (“ERA”) sets out that the award shall consist of a basic award and a compensatory award. The basic award is calculated in accordance with sections 119 to 122 ERA. The amount awarded depends on length of service in whole years, age and a week’s pay. The calculation of the award is not in dispute between the parties.

[6]Section 122(2) of ERA sets out that reductions may be made to the basic award where: “the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.”

[7]In Steen v ASP Packaging Ltd

2014 ICR 56

, EAT, the EAT, summarising the correct approach under S.122(2), held that: “The application of those sections to any question of compensation arising from a finding of unfair dismissal requires a Tribunal to address the following:(1) it must identify the conduct which is said to give rise to possible contributory fault,

(2) having identified that it must ask whether that conduct is blameworthy... the Tribunal has to ask whether it is just and equitable to reduce the amount of the basic award to any extent”

FINDINGS OF FACT

[8]The focus for this assessment is on what the employee actually did or failed to do, not on the employer’s assessment of how wrongful that act was. It is a matter of fact for the Employment Tribunal to establish and, if established, it is for the Employment Tribunal to evaluate.

[9]As to the question of whether the conduct is blameworthy, the Court of Appeal in Nelson v BBC (No.2)

1980 ICR 110

, CA gave the following guidance “The concept does not, in my view, necessarily involve any conduct of the complainant amounting to a breach of contract or a tort. It includes, no doubt, conduct of that kind. But it also includes conduct which, while not amounting to a breach of contract or a tort, is nevertheless perverse or foolish, or, if I may use the colloquialism, bloody-minded. It may also include action which, though not meriting any of those more pejorative epithets, is nevertheless unreasonable in all the circumstances. I should not, however, go as far as to say that all unreasonable conduct is necessarily culpable or blameworthy; it must depend on the degree of unreasonableness involved.” Compensatory award

[10]The compensatory award is governed by sections 123 and 124 ERA. In particular section 123 says, where relevant:(1) Subject to the provisions of this section and sections 124, 124A and 126, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable and in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.

(2) The loss referred to in subsection (1) shall be taken to include – (a) Any expenses reasonably incurred by the complainant in consequence of the dismissal, and (b) Subject to subsection (3), loss of any benefit which he might reasonably be expected to have had but for the dismissal. … (4) In ascertaining the loss referred to in subsection (1) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales… (6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.

[11]Steen also dealt with section 123(6) of ERA, and noted that the same considerations are relevant as to 122(2) save that “The Tribunal must ask for the purposes of section 123(6) if the conduct which it has identified and which it considers blameworthy caused or contributed to the dismissal to any extent. If it did not do so to any extent there can be no reduction on the footing of section 123(6), no matter how blameworthy in other respects the Tribunal might think the conduct to have been. If it did cause or contribute to the dismissal to any extent then the Tribunal moves to the next question, (4). 14. This, (4) is to what extent the award should be reduced and to what extent it is just and equitable to reduce it.” Failure to give statement of employment particulars

[12]Under section 38 of the Employment Act 2002 the following applies in relation to the failure of an employer to give a written statement of employment particulars: (3) If in the case of proceedings to which this section applies— (a)the employment tribunal makes an award to the worker in respect of the claim to which the proceedings relate, and (b)when the proceedings were begun the employer was in breach of his duty to the worker under section 1(1) or 4(1) of the Employment Rights Act 1996 …. the tribunal must, subject to subsection (5), increase the award by the minimum amount and may, if it considers it just and equitable in all the circumstances, increase the award by the higher amount instead. (4) In subsections (2) and (3)— (a)references to the minimum amount are to an amount equal to two weeks’ pay, and (b)references to the higher amount are to an amount equal to four weeks’ pay. (5) The duty under subsection (2) or (3) does not apply if there are exceptional circumstances which would make an award or increase under that subsection unjust or inequitable. ACAS Uplift

[13]Section 207A(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULR(C)A”) provides that: “If in any proceedings to which this section applies, it appears to the employment tribunal that –(a) the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies,

(b) the employer has failed to comply with that Code in relation to that matter, and

(c) the failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25 per cent.”

[14]Section 207A(5) of TULR(C)A provides that where an award falls to be adjusted under that section and under section 38 of the Employment Act 2002 the adjustment under Section 207A of TULR(C)A is made first. Section 207A(1) of TULR(C)A states that the section applies in respect of claims proceeding before an Employment Tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule A2. The schedule includes unfair dismissal claims and claims brought for breach of contract under The Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994.

[15]Pursuant to section 124A of ERA, this power applies to the compensatory award but not to the basic award Basic Award – Findings and Outcome

[16]The parties agreed that the correct calculation of the basic award under section 119 of ERA had been carried out by the Claimant in her schedule of loss. The Claimant was dismissed on 29 September 2022, she was 49 years old at the time and had 4 years’ continuous service, with gross weekly pay above relevant statutory cap of £571 per week. The correct multiplier was 1.5 x 4 x £571 = £3,426.

[17]The Respondent submitted that the basic award should be reduced as a result of the Claimant’s conduct. I set out below the respective submissions and findings of fact in relation to each element relied on by the Respondent. Alleged breach of confidentiality obligations

[18]A contractual duty of confidentiality at clause 1.10.3.8 of the Claimant’s contract required her to “use [her] best endeavours to prevent the publication or disclosure of details of the employees and officers of the Employer or any associated business and of the remuneration and other benefits paid to them” with the same obligations at 1.10.3.12 in relation “any information which [she had] been told is confidential” (p55 of the Liabilities Bundle). The Respondent asserted that the Claimant’s bonus was headed “confidential”.

[19]The Respondent referred to paragraph 11 of Mr Roper’s witness statement, which stated that “The Claimant also openly talked about her dispute with the First Respondent in relation to her discretionary bonus even though this was private and confidential.”. The Respondent says it referred to this in the memorandum of 20 May 2022 at page 214 of the Liabilities Bundle. This states “It is disappointing that you have discussed issues over discretionary bonus with members of staff who have in turn told us that you have had these discussions with them.”

[20]Mr Goodwin pointed out for the Claimant that this had never been put to the Claimant in evidence. Further the Claimant’s position is that discussing the level of bonus is not the type of culpable conduct which would justify a reduction in the level of the basic award.

[21]In my finding, the Respondent’s allegation of a breach of contract is not proven. It is not clear what the Claimant is alleged to have said, to whom and when. A generalised allegation is made that she discussed the bonus dispute, but it is not clear from this whether this relates to the dispute or specific details of the bonus (which are said to be confidential). The evidence is vague and it is apparent that it is based on hearsay evidence from “members of staff” who have not been identified. Meanwhile the allegation was not put to the Claimant in cross examination. This is not sufficient to find that there was a breach of contract, on the balance of probabilities. Alleged failure to return to work and attend meetings

[22]The Respondent alleges that the Claimant failed to return to work and failed to attend meetings. The Tribunal was referred to paragraphs 12 and 13 of Mr Roper’s witness statement, and pages 213, 214 and 221-224 of the Liabilities Bundle.

[23]Mr Roper’s statement at paragraph 12 states “I was advised that during the second quarter of 2022… she stopped coming into the office. This was not agreed by myself or Mr Dhariwal. The Claimant just told me that she would be working from home.”. The Respondent stated in submissions that this was a breach of contract. Paragraph 13 of Mr Roper’s witness statement refers to a failure to attend a meeting with Mr Roper and Mr Dhariwal on 20 May 2022.

[24]The Claimant’s submission was that, having an autistic daughter she was previously allowed to work from home, without any criticism at all. The Claimant’s position is that she had the explicit approval of Mrs Dhariwal, to work from home to care for her daughter. It was only when the Claimant started to complain about the bonus that the Respondent said that it did not want the Claimant to work from home. This was not put to the Claimant in crossexamination, had it been she could have provided a lot of detail about this. The Claimant was therefore left in position where she cannot respond.

[25]Although it is an agreed fact that the Claimant worked from home for a period of time towards the end of her employment, there is simply not enough evidence before me from which I can make a finding that this was not permitted by the Respondent. Whilst an email from Mr Dhariwal raises it at page 221 of the Liabilities Bundle, the Claimant’s contemporaneous response on the same page is that she was contractually permitted to work from home.

[26]As set out in Steen it is relevant what the Claimant actually did, not the employer’s assessment of how wrongful that act was. However, it is relevant to the findings of the underlying facts to consider the contemporaneous documentation. It is notable that in the Respondent’s memorandum of 20 May 2022, at page 214 of the Liabilities Bundle, the Respondent seeks to retain the Claimant, saying that she is a valued employee. The Respondent now appears to cast the Claimant’s working from home in a serious light, as a breach of contract, without having put it to the Claimant in cross examination. The evidence does not support a breach of a contractual obligation. Therefore, whilst I find that the Claimant did work from home in my finding, the Respondent’s allegation that this was a breach of contract is not upheld.

[27]It is agreed by the parties that the Claimant did not attend a meeting on 20 May 2022. Alleged Inappropriate Conduct

[28]The Respondent refers to emails which it says demonstrate inappropriate conduct: 28.1. an email on 1 February from Mr Ayling to Mrs Dhariwal saying: “I just had a call from Hoowla explaining that they recently had a call from Sarah Lightfoot-Webber. She was asking for a feature that isn't quite possible as it would cause crashes and problems if implemented. Her response was "Well your system is crap then!" and hung up the phone.” 28.2. an sent by the Claimant email on 10 May 2022 to the Respondent’s employees saying: “I don't know how to create a document because I don't use Hoowla. I don't need training because it is a useless system for me and not fit for purpose, except for time recording. The bespoke system we were promised has not been delivered.”

[29]The Claimant’s position is that the first allegation is based on hearsay only and that neither would justify a reduction in the basic award.

[30]Given the nature of the hearsay evidence, and in the absence of witness evidence or the allegation being put to the Claimant, I do not uphold that the Claimant made the first comment. The email of 10 May 2022 is in evidence and was therefore clearly sent. Alleged causing of financial loss to the Respondent, breaches of the Respondent’s accounts procedures and breaches of SRA regulatory rules

[31]The allegation is put in written submissions as set out above. In oral submissions, the Respondent referred to the fact that the Claimant agreed repayment plans with clients and worked without having taken fees on account. The Respondent’s position is that only a director has authority to write off invoices or agree late payments. I was referred to page 240 of the Liabilities Bundle, a spreadsheet identifying a number of Claimant’s cases, and where under the notes it says instalments or paying at conclusion. The Respondent’s position is that none of this agreed with the Respondent. The Respondent’s office accounts manual is clear that payment should be expected within 14 days. It is alleged that the Claimant was billing well in advance of matters concluding, and agreeing payment plans without authority from a director of the. That conduct is said was to have resulted in clients not paying.

[32]I was referred to paragraph 3 of Ms Fox Noble’s witness statement, which stated that “There was also a significant risk of debts not being recovered as there were no written and enforceable payment plan agreements.” I was also referred to her statement at paragraph 13 in which Ms Fox Noble said “I am advised that the current status on matters is as follows”, and listed a number of matters.

[33]I was referred to an email from a client of the Claimant’s at page 255 of the Liabilities Bundle which was said in submissions to have led to a write off of £1800. I was referred to a spreadsheet at page 240 of the Liabilities Bundle which referred, in relation client reference of 69951, to the £1,800 figure and said “Check with BD”.

[34]I was referred to an email at page 256 of the Liabilities bundle in which the Claimant told a client that a payment could be made at conclusion of the matter. This was said in submissions to be without authority.

[35]I was referred in page 111 of the Remedies Bundle, and email from a client on 10 May 2022 saying that they would dispute fees. Whilst Mr Dhariwal referred to a £2,000 write off, he conceded that this was not in evidence.

[36]In relation to the Respondent’s accounts procedures, it was alleged that the Claimant had incurred disbursements on behalf of clients without receiving payment on account, in breach of the Respondent’s procedures at page 250 of the Liabilities Bundle, which states that “As a general rule whenever practical we encourage fee earners to obtain payment on account of costs and disbursements before commencing work in a matter (in some circumstances it is accepted that this will not be typical and so should not be pursued if it may damage client relations)”. A counsel’s fee note at page 116 of the Remedies Bundle was said to be evidence of financial loss to the Respondent. It was said that there was a threatened complaint to the SRA by counsel.

[37]The Claimant’s submissions were that the Respondent was making extremely serious allegations and failing to support them. In relation to the alleged breaches of accounts procedures, these were dealt with in evidence, what the Claimant said in evidence was that she did have authority to offer various arrangements. She was the Head of Family law and it was entirely understandable that she would be given authority, explicit authority, to do this. The Claimant gave evidence that she had specifically discussed payment plans in appraisals with Mr Dhariwal. The Respondent was choosing and cherrypicking docs. The Claimant’s position was that different work was billed in different ways; sometimes with money on account, sometimes without. This was specifically provided for in accounting procedures.

[38]In relation to the issue of incurring disbursements and counsel’s fees, the Claimant submits that the fees would be incurred whether or not there was money on account. The Claimant’s position is that this is a matter arising post resignation – the fee is incurred on 7 June 2022, but anything that follows must have happened after the Claimant’s resignation on 9 June 2022.

[39]In my finding, these are very serious allegations which are put without being sufficiently supported by the evidence before the Tribunal. I note that Ms FoxNoble conceded in cross examination that she had not written her own witness statement, the relevant paragraph 13 refers to the fact that Ms Fox-Noble is “advised that”, before setting out the relevant “status on unpaid matters”. It is therefore entirely unclear what the source of the information is as Ms Fox-Noble did not have access to client files. The matters listed in paragraph 13 have vague references to financial losses such as “client defaulted in payments, claiming costs excessive and is refusing to enter into a payment plan. Continuing to chase.”. This does not set out a specific financial loss, nor does it adequately evidence how the relevant alleged loss can be said to have been caused by the Claimant, rather than simply being part of the ordinary course of business that certain customers pay invoices and others do not pay them. Similarly, the submission relating to a £1,800 write off, refers to a spreadsheet at page 240 of the Liabilities Bundle, which does not evidence a write off at all.

[40]I prefer the evidence of the Claimant, which was given from her own knowledge rather than being hearsay evidence from an unspecified source. I therefore make a finding that the Claimant did have authority to offer various financial arrangements to clients.

[41]In summary, the allegation of financial loss caused to the Respondent by the Claimant is not evidenced and is not upheld.

[42]The Respondent’s written submissions referred to breaches of unspecified SRA rules. This is a very serious allegation which was not evidenced at all. Reference was made in oral asubmission to the threat of a complaint to the SRA by counsel but no evidence of this was provided. This allegation is not upheld.

[43]In my finding a breach of the Respondent’s accounts procedure by incurring disbursements without client monies on account has not been proven. The relevant procedures say that monies on account should be sought as a general rule, but will not always be appropriate. As such, it is not clear that not obtaining monies on account before instructing counsel is in breach of this procedure. Allegedly Causing Support Staff to be Upset and Leave

[44]Paragraph 109 of the Liabilities Judgment dealt with the same allegation, and I made a finding that these were not credible. I do not propose to re-open matters I have already made findings on, and therefore rely on the finding in the Liabilities Judgment. Allegedly soliciting the Respondent’s clients

[45]The Respondent was clear that even on its own case, it could not be sure that the alleged solicitation took place before 9 June 2022, the date of the Claimant’s resignation. In the absence of any evidence of when this allegedly took place, even taking the Respondent’s case at its highest, in my finding this cannot be proven to have taken place before the Claimant’s resignation. As such it cannot be relevant to section 122(2) of ERA. Summary Findings Regarding Conduct

[46]In summary, in relation to the Respondent’s allegations of conduct relevant to section 122(2) of ERA, I have dismissed all of the allegations, save that I have found that the Claimant: 46.1. worked from home towards the end of her employment; 46.2. did not attend a meeting on 20 May 2022; and 46.3. sent an email on 10 May 2022 to the Respondent’s employees saying: “I don't know how to create a document because I don't use Hoowla. I don't need training because it is a useless system for me and not fit for purpose, except for time recording. The bespoke system we were promised has not been delivered.”

[47]Having regard to the definition of blameworthy conduct set out in Nelson v BBC, and in all of the circumstances of the case, I do not consider that any of the proven conduct (set out at paragraph 46) was blameworthy. It is not the type of behaviour envisaged by the term blameworthy, which envisages some type of serious conduct like disloyalty or dishonesty. The intention is not for employers to comb through every detail of a claimant’s conduct and seek to point to minor and trivial matters to attempt to justify a reduction in the basic award.

[48]In the absence of any blameworthy conduct on the part of the Claimant, I make no reduction to the basic award and award it in the sum of £3,426. Compensatory Award – Discussion and Outcome

[49]The Respondent admits the Claimant’s loss of earnings in the sum of £616.92. The claim for travel expenses is disputed on the basis that it is not evidenced. The Respondent disputes the sum of £637.90 sought in respect of loss of statutory rights, and argues that it should be the £500 as claimed by the Claimant in her Schedule of Loss at page 39 of the Liabilities Bundle.

[50]Notwithstanding a finding at paragraph 120 of the Liabilities Judgement that there should be no Polkey reduction and that there was no contributory fault on the part of the Claimant, the Respondent made submissions that the compensatory award should be reduced pursuant to section 123 of ERA. Reference was made to the Claimant’s conduct and an argument that the Claimant would have been dismissed due to the same conduct allegations as set out above in relation to the basic award.

[51]I do not welcome an attempt to revisit matters on which I have already made findings. However, in any event, my findings in relation to a deduction under section 122(2) of ERA would apply. I have found that there has been no blameworthy conduct on the Claimant’s part, see paragraphs 46 and 47 above.

[52]I therefore make an unreduced award of £616.92 in relation to lost earnings. In the absence of evidence regarding travel costs, I make no award in that regard. In relation to the loss of statutory rights, I consider £500 to be the appropriate sum to reflect that loss to the Claimant. ACAS Reduction/Uplift – Discussion and Outcome

[53]The Claimant seeks a 25% uplift to compensation. She makes a submission that her two emails of 9 March 2022 (pages 183-185 and 186 of the Liabilities Bundle), and 26 April 2022 (pages 196-197 of the Liabilities Bundle and the Claimant’s note given to Mr Dhariwal on 10 May 2022 (Liabilities Judgment, paragraph 72) individually or collectively amounted to a grievance. The Claimant’s position is that the Respondent ought to have dealt with them in accordance with the Acas Code of Practice on disciplinary and grievance procedures (the “ACAS Code”).

[54]The Claimant alleges that the Respondent failed to comply with the ACAS Code (with reference to paragraphs of the ACAS Code) by: 54.1. failing to independently investigate Claimant’s complaints (paras 4 and 32). 54.2. failing to meet with the Claimant to discuss the complaints (paras 33- 34). 54.3. not inviting the Claimant to be accompanied to any meetings (paras 35-39). 54.4. failing to impartially consider the complaints (paras 4, 32 and 40). 54.5. failing to offer the Claimant an opportunity to appeal any outcome (paras 41-45).

[55]The Respondent’s position is that it sought to resolve the issue informally, saying that Ms Dhariwal and Ms Fox-Noble had fully investigated the issue and that several meetings had taken place, and Mr Dhariwal had responded in writing in a memorandum on 20 May 2022 (page 214 of the Liabilities Bundle).

[56]The Respondent made submissions that any award should in fact be reduced by 25% on the basis of the following allegations: 56.1. the Claimant’s wilful breaches of confidentiality; 56.2. the Claimant’s agreement that she accepted the Respondent’s position on 7 April 2022 to then without warning amend her position; 56.3. the Claimant’s refusing to attend R’s premises without permission; and 56.4. refusing to attend a hearing to review the decision made as communicated in the memorandum.

[57]In my finding, the content of the Claimant’s emails of 9 March 2022 and 26 April 2022 clearly constituted a grievance – the ACAS Code refers to these as “concerns, problems or complaints that employees raise with their employers”. I make no finding in relation to the note of 10 May 2022 because it is not in evidence. Paragraph 32 refers to a grievance being formally raised when it is raised in writing, as this was by the Claimant. This then triggers the application of the ACAS Code.

[58]Even taken at their highest, I consider the conduct referred to by the Respondent is entirely irrelevant. Matters 56.1 to 56.3 do not appear to relate to the ACAS Code at all. In relation to 56.4, an employee not attending a meeting after a decision has been communicated is not a breach of a provision of the ACAS Code.

[59]Whilst the process was not framed as a formal grievance process, in my finding, there were two meetings with Mr Dhariwal to discuss the Claimant’s grievance on 7 April 2022 and 10 May 2022 (pages 193 and 214 of the Liabilities Bundle).

[60]Paragraph 35 of the ACAS Code states “Workers have a statutory right to be accompanied by a companion at a grievance meeting which deals with a complaint about a duty owed by the employer to the worker. So this would apply where the complaint is, for example, that the employer is not honouring the worker’s contract.” The Claimant was not informed of her right to be accompanied, as would be best practice, despite the fact that her complaint related to a complaint about honouring her contract. However, she also did not make a request to be accompanied, so it cannot be said that the requirement to allow an employee to be accompanied has been breached.

[61]The obligation at paragraph 4 of the ACAS Code states “Employers that carry out any necessary investigations, to establish the facts of the case”. In this case it does not appear that the facts were in dispute; this was a dispute about contractual interpretation. The Claimant relies on paragraphs 4, 32 and 40 of the ACAS Code as requiring an independent investigation and to impartially consider the complaint. However, there is no reference to an independent investigation, or impartial consideration set out in those paragraphs. The ACAS Guidance certainly refers to those as best practice, but acknowledges that in a small company there may not be alternative managers to consider a grievance raised by an employee. The memorandum dated 20 May 2022 (page 214 of the Liabilities Bundle) prepared by Mr Dhariwal meets the requirement at paragraph 40 of the ACAS Code to communicate a decision in writing to the employee.

[62]Paragraph 40 of the ACAS Code also states that: “The employee should be informed that they can appeal if they are not content with the action taken.” The memorandum dated 20 May 2022 stated “Should you wish to discuss any items, please do not hesitate to contact me.”. This was not sufficient to constitute informing the Claimant that she could appeal. This is a breach of the ACAS Code.

[63]In my finding there was one breach of the ACAS Code by the Respondent in that there was no appeal offered to the Claimant. I take into account that the ACAS Code was applied to some extent as set out above and that the failure appears to be advertent in that the Respondent was not treating the Claimant’s emails as a formal grievance. However, notwithstanding the small size of the Respondent, it is a law firm which holds itself out as specialising in employment law, and had an employee Mrs Dhariwal, the Practice Manager, who dealt with HR matters. For those reasons, in my finding the failure was unreasonable. In my finding, a just and equitable percentage reflecting all of the circumstances is 10%. This does not overlap with any other awards. This amounts to £111.69 which is a proportionate sum when considered in absolute terms. Failure to give statement of employment particulars – Discussion and Outcome

[64]The Respondent’s position in the Grounds of Resistance was that there had been a transfer of the Claimant’s employment pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) from the Second Respondent to the First Respondent. I made a finding of fact that a TUPE transfer had taken place at paragraph 54 of the Liabilities Judgment. Notwithstanding this, the Respondent made a submission in relation to this head of loss that there had been no TUPE transfer. The Respondent also argued that the Claimant had not suffered any prejudice as there had been no confusion. The Respondent argued that these points meant that there were exceptional circumstances making it unjust to make an award.

[65]The Claimant submitted that the award of two weeks’ pay was mandatory. The Claimant was told that she would be transferred pursuant to TUPE and the Respondent had simply never followed up to say that her employment had now transferred and confirm the identity of her employer. It is central to the relationship to know who the employer is. The Claimant had been threatened with costs because she had sued the First and Second Respondent as a result of the confusion. The Claimant argued that this was a case where four weeks should be awarded. The Respondent is a law firm purporting to provide employment law advice, there is no way that they are unaware of this basic requirement.

[66]The mandatory award is two weeks’ pay, there is no exceptional circumstance which would justify a reduction to that. The Respondent’s submissions do not stand up to scrutiny, the finding of a TUPE transfer was conceded by them and was their own submission made at the liability stage. There clearly had been confusion on the Claimant’s part, which is why both the First and Second Respondent were respondents to the Claimant’s claim. I take into account that the Respondent is a law firm which purports to specialise in employment law, as well as the fact that the Claimant did have particulars of employment, but that these had not been updated. In all of the circumstances, my finding is that a two week award is appropriate, I do not exercise my discretion to make an award of four weeks. I therefore make an award of £1,187.68 Bonus payment

[67]At paragraph 86 of the liabilities judgment, I made a finding that a bonus payment of £7,035.75 (gross) should have been paid to the Claimant, on the 29 April 2022.

[68]The Claimant argues that because the rate of taxation would be different in the current tax year, in order to ensure that the Claimant receives on a net basis what she should have received in the 22/23 tax year, an adjustment should be made to the award. These points were made in oral submissions for the first time. It was not raised in the Claimant’s Schedule of Loss or written submission. No evidence was submitted to the Tribunal regarding the Claimant’s tax position as at 29 April 2022 and as at the date of the remedies hearing, and how the calculations would differ.

[69]It is correct as a matter of law that losses for breach of contract should be grossed up and that the relevant tax year for grossing up is the year that the award is received by the complainant. However, in the absence of any evidence of a difference in the tax rates, I do not consider it appropriate to make guesses regarding the Claimant’s tax position which will vary according to all sources of income, not just that from employment. For that reason, I simply award the breach of contract figure as a gross sum in the sum of £7,035.75.

[2]In a remedies judgment dated 15 June 2023, I ordered the First Respondent to pay the Claimant a total of £12,878.04 in respect of basic award, compensatory award, failure to give employment particulars and breach of contract.

[3]The Claimant’s application for costs/wasted costs runs to 9 pages and was accompanied by a Costs Application Bundle of 33 pages. She makes two applications in the alternative: all of her costs, and the costs of the remedies hearing only.

[4]The Claimant and Respondents each submitted written submissions in relation to costs. I was also referred to a Remedies Bundle of 116 paginated pages. The Liabilities Bundle of 256 paginated pages was also referenced. Submissions were made in the hearing in relation to the Claimant’s costs application, but it was agreed with the parties that this would be dealt with after the remedies judgment had been given. Each party then made submissions in writing about without prejudice discussions relied on by the Claimant as demonstrating unreasonable behaviour. THE CLAIMANT’S APPLICATION

[5]The Claimant seeks all of her costs (£3,700 plus VAT) based on the following allegations of unreasonable conduct and on the basis that the Respondents’ response in part or in full had no reasonable prospects of success. She relies on the Respondents’ alleged conduct as follows: 5.1. advancing a fundamentally misconceived argument that the Claimant did not have sufficient service for an unfair dismissal claim, and using it to make threats of costs against the Claimant; 5.2. taking an obstructive approach to disclosure; 5.3. use of inappropriate documents; 5.4. providing witness evidence late which exceeded the Tribunal’s word limit; 5.5. conduct during the hearing: 5.5.1. asking leading questions in re-examination notwithstanding being warned about such conduct by the Employment Judge; 5.5.2. raising his voice and being argumentative and aggressive towards the Claimant during cross-examination; 5.5.3. seeking to give evidence in cross-examination notwithstanding being warned about such conduct by the Employment Judge; 5.5.4. misrepresenting the Claimant’s answers in submissions; 5.5.5. being late for the second day of the hearing; 5.6. failing to comply with case management orders for the Remedies Hearing regarding disclosure, an agreed bundle and index, which was not complied with until the working day before the hearing on 2 June 2023; 5.7. including documents in the remedies bundle which appear to unilaterally waive privilege over five of its clients’ legal matters; 5.8. acting unreasonably in relation to without prejudice discussions. The Claimant relies on the fact that on 20 February 2023, the day before the hearing, she made a settlement offer of £9,000, and that this was repeated on 21 February 2023, but that the Respondents did not engage. On 1 May 2023, the Claimant made another offer of £10,392.00 which she says: set out the basis for calculation, took a commercial approach to each head of loss and included a costs warning. She says that the Respondents completely ignored that offer. The Respondents offered £5,010.09 on 12 June 2023, after the remedies hearing but before the Remedies Judgment had been issued, the Claimant argues that this was a tactical offer made after all costs had been incurred.

[6]The application in relation to the costs of the remedy hearing only (£1,200 plus VAT) relies on the following allegations relating to the alleged unreasonable conduct of the Respondent. The Claimant says that these caused delays and resulted in the need to list a separate remedy hearing. She relies on the Respondent: 6.1. providing witness statements very late; 6.2. providing excessively long witness statements, requiring time to be taken from the hearing to cut them down; 6.3. failing to provide mark-ups of the reduced statements in a timely fashion, slowing cross examination; 6.4. asking leading questions during re-examination, requiring intervention from the Employment Judge and slowing the progress of the trial as a result; 6.5. Mr Dhariwal’s conduct during cross-examination, requiring intervention from the Employment Judge; 6.6. exceeding the time estimate for cross-examination by more than 50%; 6.7. arriving late on the second day / failing to aim to arrive appropriately early on the second day, causing a later than planned start. THE RESPONDENTS’ POSITION

[7]The Respondents submitted written submissions for the remedies hearing, pages 8 to 22 of which related to the Claimant’s costs application. The Respondents position was as follows: 7.1. the Respondents point to Claimant being “complicit” in the bundle for the liabilities hearing being longer than the ordered 190 pages (it is unclear how this relates to the points put by the Claimant); 7.2. attempts to exchange witness statements were made by the Respondents on 14 February 2023 (page 94 Remedies Bundle), 15 February 2023 (page 100 Remedies Bundle) and 17 February 2023 (page 104 Remedies Bundle); 7.3. the Respondents accept that their witness statements were over the word count, but takes the position that this did not cause delays as preliminary matters had always been intended to be dealt with. They say that amendments were produced in track changes; 7.4. Mr Dhariwal admits to asking some leading questions during reexamination, but states it was not deliberate and was due to inexperience in advocacy; 7.5. Mr Dhariwal also conceded that he had become “animated” but said that he had apologised to the Claimant; he had believed that the Claimant was deliberately evasive and cross examination is an often contentious process. However, he denies being argumentative or aggressive; 7.6. Mr Dhariwal gave the best estimate of time but he admits this was exceeded. The Respondents say that this was in part due to the evasive answers being provided by the Claimant. In any event, the estimate was not fixed but estimated and the Employment Judge permitted additional time; 7.7. the Respondents’ position is that it is not the Respondents’ fault that a separate remedies hearing was required. The reason for a separate remedies hearing was that there were only two days for all of the evidence, the majority of the first morning was taken up by the Claimant’s late application to amend. It is not unusual that a Tribunal directs a separate remedy hearing; 7.8. the Respondents appear to rely on their appeal and/or application to adjourn in relation to the allegation that they failed to comply with the case management orders for the Remedies Hearing; and 7.9. the Respondents deny that their approach to without prejudice discussions was unreasonable. FINDINGS OF FACT Respondents’ Response

[8]The Claimant alleges that the Respondents’ response in part or in full had no reasonable prospects of success and refers to the Respondents’ argument that the Claimant did not have sufficient length of service to bring an unfair dismissal claim. Whilst this was incorrect in its reflection of the legal position (see below at paragraph 9), the Respondents argued an alternative position that there had been no fundamental breach of contract so as to justify the Claimant’s resignation. In my finding, the defence against the unfair dismissal claim cannot be said to have had no reasonable prospect of success. In relation to correspondence with the Claimant regarding length of service, that is dealt with below. Alleged Misconceived Argument

[9]The Respondents’ position as set out in the Grounds of Resistance at paragraph 4 was that there had been a transfer of the Claimant’s employment on 29 January 2021 pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) from the Second Respondent to the First Respondent. Nevertheless the Respondents sought to argue, at paragraph 9 of the Grounds of Resistance, that the Claimant did not have sufficient length of service to bring an unfair dismissal claim. This could only have been the case if the Respondents did not take into account that the Claimants length of service would have transferred on a TUPE transfer.

[10]On 10 February 2023 (at page 2 of the Costs Bundle) and 13 February 2023 (at page 3 of the Costs Bundle), the same point was made in letters to the Claimant, saying that if she discontinued claims with no prospects of success this would save costs and reserving the right to pursue costs against her if it was found that such claims should have been withdrawn prior to the hearing.

[11]The Respondents did not pursue an argument at the hearing that the Claimant did not have sufficient service for an unfair dismissal claim. This was withdrawn at the beginning of the liability hearing.

[12]The Respondents’ written submissions in relation to the costs application, at paragraph 28, stated that their position regarding the length of service had been based on the fact that they did not consider that a TUPE transfer had taken place. This explanation was hard to sustain in the face of an express position at paragraph 4 of the Grounds of Resistance, that there had been a TUPE transfer. When this was pointed out Mr Dhariwal, he sought to explain it away by saying that this related to a point prior to the proceedings commencing. This did not persuade the Tribunal, since matters prior to the start of proceedings were not in issue.

[13]The Respondents’ are a law firm holding themselves out as specialists in employment law (page 6 Costs Bundle). Mr Dhariwal himself stating in his Solicitors Regulation Authority profile that he practices in employment law (page 7 Costs Bundle).

[14]Against this background, it was unreasonable for the Respondents to write to the Claimant on 10 and 13 February 2022 in the terms that it did, seeking to put pressure on her to concede that she did not have sufficient length of service for an unfair dismissal claim. This position was clearly unsustainable in circumstances, when the Respondents position since the date of the Grounds of Resistance on 11 October 2022 had been that there had been a TUPE transfer of the Claimant’s employment. Alleged Obstructive Approach to Disclosure

[15]On 16 November 2022 the Notice of Video Hearing was sent to the parties and contained standard Case Management Orders which required the parties to send one another a list of documents within six weeks of the date of the letter. It states “They shall send each other a copy of any of these documents if requested to do so.” No date was set for the sending of these documents. The Claimant complains that she requested the documents on 3 January 2023 but the Respondents did not send their documents until 30 January 2023. The Respondents rely on Mr Dhariwal being on sick leave as the reason for the delay but did not provide any dates of his absence.

[16]In the absence of any specific deadline the Tribunal does not uphold this allegation as being unreasonable. Alleged Use of Inappropriate Documents

[17]The Claimant complains that certain documents contained irrelevant personal information which were intended to and did cause the Claimant distress and were not referred to by the Respondents. The Respondents position is that these emails were background documents to demonstrate the Respondent’s providing support to the Claimant during the employment relationship.

[18]In addition the Claimant points out that the Respondents sought to include an email from a potential witness explaining why she did not wish to give witness evidence. This document was excluded from the Hearing Bundle as a preliminary point, see paragraphs 11 to 13 of the Liability Judgment.

[19]Whilst I understand the reasons the Claimant may have found it distressing, I do not consider that there is evidence based upon which I could make a finding that these were intended by the Respondents to cause distress. Numerous documents in the Liabilities Bundle were not referred to, as is normal. Being unsuccessful in a dispute about the appropriateness of a document is also not unusual.

[20]I do not make a finding of unreasonableness by the Respondents in relation to the use of documents. Late Witness Evidence

[21]The parties both made attempts to exchange witness statements. Attempts to exchange witness statements were made by the Respondents on 14 February 2023 (page 94 Remedies Bundle), 15 February 2023 (page 100 Remedies Bundle) and 17 February 2023 (page 104 Remedies Bundle). The Claimant wished to complete her page references to the Hearing Bundle before exchanging witness statements. The Claimant had not received the paginated Hearing Bundle at this point, so said that she was not ready. On 17 February 2023 the Respondents sent their witness statements to the Tribunal without copying the Claimant.

[22]The co-founding partner of the Respondents, Mr Amar Sandhu, passed away on 17 February 2023.

[23]The Claimant received the paginated Hearing Bundle at 11.07 on 17 February 2023 and confirmed by email to the Respondent’s at 17.17 that she was ready to exchange witness statements. This email was sent to a typist at the Respondents, whose email footer stated that any replies should be copied to Mr Dhariwal’s assistant. The Claimant, however, did not copy her email to Mr Dhariwal’s assistant (page 58 of the Remedies Bundle). The Respondents say that the typist had gone home at this point. However, the typist did send a further email, the following day 18 February 2023 (a Saturday) (page 22 of the Costs Bundle), so had accessed their email account at that time. The Claimant emailed Mr Dhariwal directly on Sunday 19 February 2023 at 15.03 asking that they exchange on Monday morning and pointing out that since the Respondents witness statements had already been filed with the Tribunal there could be justification in preventing exchange.

[24]After several email exchanges the Respondents did not send their witness statements to the Claimant until 16.39 on 20 February 2023, the day before the hearing. The Respondents say this is because Mr Dhariwal was out of the office following the bereavement and his assistant was not confident to exchange witness statements.

[25]It was unreasonable to send the Respondents witness statements to the Tribunal on Friday 17 February 2023 without copying the Claimant, and then delay until 16.39 on Monday 20 February 2023 to send them to her, when all that was required was to forward an existing email, which should have been copied to the Claimant in any event. This left the Claimant and her representatives with very little time to prepare for the hearing which started on 21 February 2023. I take into account the mitigating circumstances in relation to the bereavement, but the Claimant should have been copied on the email sending the statements to the Tribunal. On Monday morning this could have easily been forwarded to the Claimant by the assistant helping on the case. It would have been clear to the Respondents, in particular Mr Dhariwal, Head of Litigation, that witness statements were central to the case, as is almost invariably the case in any litigation.

[26]Further the Respondents had significantly exceeded the word limit for witness statements set out in the Case Management Orders, of 5,000 words. The statements ran to 7,085 words. In the absence of any application to the Tribunal, made in good time, and in the context of the late provision of the witness statements this was unreasonable. Allegations regarding Conduct During the Hearing

[27]It is agreed by the parties that Mr Dhariwal asked some leading questions in re-examination. I had warned Mr Dhariwal about such conduct. He denies that it was a deliberate tactic as alleged by the Claimant, and there is no evidence before the Tribunal of this.

[28]At one point during cross-examination Mr Dhariwal raised his voice saying “just answer the question”. I told Mr Dhariwal that it was not appropriate to raise his voice and he apologised. This was acknowledged in the Respondents submissions.

[29]Claimant alleges and the Respondents deny that Mr Dhariwal was argumentative and aggressive. I do not consider that Mr Dhariwal was argumentative and aggressive in the way he conducted cross-examination except as set out in paragraph 28 above.

[30]I was required to remind Mr Dhariwal that he should not seek to give evidence in cross-examination. In submissions Mr Dhariwal incorrectly stated that the Claimant had agreed in cross-examination that the failure to pay the bonus was not a breach of contract and was corrected by me on this point.

[31]The Claimant says that the Respondents exceeded the time estimate for crossexamination by more than 50%. The Respondents admit that the time estimate was exceeded by Mr Dhariwal, but submits that it was an estimate and not fixed, and submits that was in part due to “evasive answers” being provided by the Claimant.

[32]The parties agreed an earlier start time for the second day of the hearing, at 9:30 AM. However Mr Dhariwal arrived later, so the hearing could not commence until 10 AM, and he stated that this had been because of traffic. The Claimant’s position is that Mr Dhariwal’s explanation that a journey which would normally take 25 minutes had taken an hour meant that he must have only left himself five minutes of leeway which is unacceptable. The Respondents position is that this was a general explanation and not a forensic response.

[33]Overall the Tribunal does not consider that the conduct of Mr Dhariwal can be described as unreasonable during the hearing. These types of issues are common in liabilities hearings and not sufficiently serious to be described as unreasonable whether in isolation or when taken together.

[34]The Tribunal considers that a separate Remedy Hearing had to be listed due to the volume of matters to be considered including preliminary matters, such as the Claimant’s amendment application, the number of witnesses and the complexity of the claim. This had not been anticipated by the parties or in the listing, which reflected the time taken for a normal unfair dismissal claim. However, the Tribunal does not consider that any of the parties were at fault in relation to the need for a Remedy Hearing. Failure to comply with Case Management Orders for Remedies Hearing

[35]The Respondents appear to rely on their appeal/application to adjourn as an excuse for a failure to comply with the Tribunal’s orders. The relevant documents were sent to the Claimant the day before the hearing. Once again I have to take into account that the Respondents are a law firm specialising in both Employment and Civil litigation, and should therefore be that the making of such an application does not operate as a stay on proceedings.

[36]In the circumstances, I consider this is unreasonable behaviour and echoes earlier failures to comply with the Tribunal’s orders. These create difficulties for the Claimant’s preparations for the hearing. Use of privileged client documents in Remedies Bundle

[37]The Tribunal considers that there is not enough evidence to make findings as to whether the relevant clients have consented to the use of these documents. The points made by the Claimants (cherry picking, documents dated long after the Claimant has left) are relevant to the relative weight that should be placed on them. The Tribunal does not make a finding that the inclusion of these in the bundle is unreasonable conduct. Allegations regarding Without Prejudice Offers

[38]The without prejudice offers relied on by the Claimant were made at a very late stage in the proceedings, the working day before, and the first day, of the hearing, and in my finding, at this stage of the proceedings, when the Respondents had made all of their preparations for the hearing, it was not unreasonable for the Respondents to reject those offers even though they were ultimately beaten by the Claimant. On 1 May 2023, the Respondents had a reconsideration application and appeal outstanding, and again I do not find it was unreasonable to wish to proceed with the litigation in those circumstances.

THE LAW

[39]Rule 76 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (the “Tribunal Rules”) provides: 1) A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that – a) A party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way the proceedings (or part) have been conducted; or b) Any claim or response has no reasonable prospect of success or c) …… 2) A Tribunal may also make such an order where a party has been in breach of any order or any practice direction or where a hearing has been postponed or adjourned on the application of a party.”

[40]Rule 78 provides: “1) A costs order may – a) Order the paying party to pay the receiving party a specified amount, not exceeding £20,000, in respect of the costs of the receiving party.”

[41]Although the Tribunal Rules provide me with the power to make costs awards, such awards in Employment Tribunal proceedings are the exception rather than the rule (Gee v Shell UK Ltd

[2003] IRLR 82

[42]Milan v Capsticks Solicitors LLP & Others

UKEAT/0093/14/RN

sets out a structured approach to be taken in relation to an application for costs where the then President of the EAT, Langstaff J, described the exercise to be undertaken by the Tribunal as a 3 stage exercise at paragraphs 52: “There are thus three stages to the process of determining upon a costs order in a particular amount. First, the tribunal must be of the opinion that the paying party has behaved in a manner referred to in [Rule 76]; but if of that opinion, does not have to make a costs order. It has still to decide whether, as a second stage, it is “appropriate” to do so. In reaching that decision it may take account of the ability of the paying party to pay. Having decided that there should be a costs order in some amount, the third stage is to determine what that amount should be. Here, covered by Rule [78], the tribunal has the option of ordering the paying party to pay an amount to be determined by way of detailed assessment in a county court.”

[43]The EAT decided in Dyer v Secretary of State for Employment EAT 183/83 that “unreasonable” has its ordinary English meaning and is not to be interpreted as if it means something similar to “vexatious”. It will often be the case, however, that a Tribunal will find a party’s conduct to be both vexatious and unreasonable. Whether conduct is unreasonable is a matter of fact for the Tribunal to decide.

[44]In AQ Ltd v Holden

UKEAT/0021/12/CEA

His Honour Judge Richardson stated that a Tribunal cannot and should not judge a litigant in person by the standards of a professional representative. Justice requires that Tribunals do not apply professional standards to lay people, who may be involved in legal proceedings for the only time in their life. Tribunals must bear this in mind when assessing the threshold tests. Even if the threshold tests for an order for costs are met, the Tribunal must exercise its discretion having regard to all the circumstances and it is not irrelevant that a lay person may have brought proceedings with little or no access to specialist help or advice. However, Judge Richardson said in paragraph 33: “This is not to say that lay people are immune from orders for costs: far from it, as the cases make clear. Some litigants in person are found to have behaved vexatiously or unreasonably even when proper allowance is made for their inexperience and lack of objectivity.”

[45]Similarly, in Vaughan v London Borough of Lewisham & Ors (No. 2)

[2013] IRLR 713

, the EAT declined to interfere with a substantial costs order against an unrepresented party. Underhill J observed that “the basis on which the costs threshold was crossed was not any conduct which could readily be attributed to the appellant's lack of experience as a litigant”.

[46]Calderbank v Calerbank

[1975] 3 All ER 333

is a case regarding without prejudice save as to costs offers, this applies in family proceedings and not to Employment Tribunal proceedings. However in Kopel v Safeway

2003 IRLR 753

the EAT upheld the Tribunal’s finding that the Claimant’s failure to accept the employer’s substantial offer of settlement was unreasonable conduct of the proceedings. The Tribunal is entitled (but not required) to make a finding on the facts that the rejection of a without prejudice offer is unreasonable, and may take it into account in exercising its discretion in relation to costs. Costs warnings may also be taken into account.

[47]In McPherson v BNP Paribas (London Branch)

[2004] EWCA Civ 569

Mummery LJ stated: [40] … “The principle of relevance means that the tribunal must have regard to the nature, gravity and effect of the unreasonable conduct as factors relevant to the exercise of the discretion, but that is not the same as requiring BNP Paribas to prove that specific unreasonable conduct by Mr McPherson caused particular costs to be incurred.”

[48]In Yerrakalva v Barnsley Metropolitan Borough Council and another

[2012] ICR 420

, CA Lord Justice Mummery held: “The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and ask whether there was unreasonable conduct by the Claimant in bringing and conducting the case and, in doing so, identify the conduct, what was unreasonable about it and what effects it had.” That case also decided that although there was no requirement for the Tribunal to determine whether there is a precise causal link between the unreasonable conduct in question and the specific costs being claimed, that did not mean that causation is irrelevant.”

[49]In Lodwick v Southwark London Borough Council

[2004] ICR 884

, CA, the Court of Appeal determined that at both stages of the Tribunal’s discretion to make a costs award, the fundamental principle that costs awards are compensatory not punitive, must be observed.

CONCLUSIONS

[50]I have decided it is appropriate to deal with this application by considering costs rather than wasted costs because the Respondents are representing themselves.

[51]There are three stages to be applied: 51.1. finding whether the Respondents have behaved unreasonably in the way the proceedings have been conducted; 51.2. considering whether it is appropriate to make a costs order; and 51.3. considering whether I should exercise my discretion in making such an order.

[52]With regard to the way in which the proceedings were conducted by the Respondents, I made a finding above that the following conduct of the Respondents was unreasonable: 52.1. writing to the Claimant on 10 and 13 February 2022 in the terms that it did, seeking to put pressure on her to concede that she did not have sufficient length of service for an unfair dismissal claim; 52.2. sending the Respondents witness statements to the Tribunal on Friday 17 February 2023 without copying the Claimant, and then delaying until 16.39 on Monday 20 February 2023, the day before the hearing, to send them to the Claimant; 52.3. significantly exceeding the word limit for witness statements; and 52.4. failing to comply with case management orders for the Remedies Hearing.

[53]Having found that some of the conduct on behalf of the Respondents was unreasonable, there is no requirement for this Tribunal to award costs. There are a number of factors to consider, including the nature, gravity and effect of the unreasonable conduct, although there is no principle that costs should only be awarded where they can be shown to have been incurred by specific instances of unreasonableness.

[54]In this case, I find that it is appropriate to award costs against the Respondents in respect of the conduct outlined above, in particular in relation to the witness evidence which caused significant difficulty and disruption to the Claimant’s preparation for the hearing. If the Claimant’s counsel had not been as diligent as he was in preparing cross examination after close of normal business hours on the day before the liability hearing, despite having a young child at home, the hearing would likely have had to be adjourned. Witness statements within the correct word count were not received by the Claimant until the afternoon of the first day of the hearing. This put significant pressure on the Claimant’s representation in the circumstances.

[55]In deciding whether costs should be awarded, I am permitted to take into account the Respondents’ ability to pay. However, there were no submissions or evidence in respect of their ability to pay and, therefore, this does not affect my decision in finding that it is appropriate to award costs.

[56]Having found that there was unreasonable conduct and that it is appropriate to award costs, I am still required to address my mind to whether I should exercise my discretion in awarding costs in this matter. In other words, I must decide whether it is just to exercise the power to award costs. The basic principle is that the purpose of an award of costs is to compensate the party in whose favour the order is made, not to punish the party ordered to pay the costs. Looking at all the evidence in the round, I find that is just to award costs in this matter to take into account the conduct outlined above. Given the nature of the findings of unreasonableness when considered in the context of the case overall, I make an award of costs in the sum of £2,000 plus VAT.

Background

[2]In a reserved remedies judgement dated 15 June 2023, I determined that the First Respondent must make the following payments to the Claimant:a. Basic award: £3,426;

b. Compensatory award: £1,228.61 (including an ACAS uplift of £111.69);

c. Failure to give employment particulars: £1,187.68; and

d. Breach of Contract: £7,035.75 (gross).

[3]The First Respondent now applies for a reconsideration of that Judgment. The grounds are set out in the First Respondent’s letter dated 10 July 2023. In summary, the grounds are that:a. in relation to alleged breach of confidentiality obligations by the Claimant, the Respondent considers that there is very clear evidence of the same and applies for a 40% reduction in the Basic Award as a result;

b. the First Respondent produces a newly discovered email, which it says proves that the Claimant breached contractual non-solicitation obligations and seeks a reduction to the Compensatory Award;

c. it objects to a breach of contract award being made on a gross basis since the First Respondent says it must make deductions for tax and insurance. The Rules

[5]Rule 71 provides that an application for reconsideration under Rule 70 must be made within 14 days of the date on which the decision (or, if later, the written reasons) were sent to the parties.

UKEAT/0002/16/DA

[8]The First Respondent’s application was received within the relevant time limit. I therefore consider it under Rule 72.

Discussion

[9]In relation to the alleged breach of confidentiality obligations, taken at its highest the Claimant said to Mr Roper and Tracey that “the firm were being underhand by refusing to pay her, and also Mr Dhariwal had breached his promise to make her a Director”. The Claimant was not cross examined on this. However, even if this allegation is true and having regard for the definition of blameworthy conduct set out in Nelson v BBC (No.2)

1980 ICR 110

, and all of the circumstances of the case, this conduct is not the kind of behaviour envisaged by the term blameworthy and would not justify a reduction to the Basic Award.

[10]The First Respondent appears, in the second ground, to be challenging the decision that there should be no reduction for contributory fault and Polkey. This was determined at paragraph 120 of the Liabilities Judgment. As such, it cannot be challenged in a reconsideration application in relation to the Remedies Judgment.

[11]To the extent the second ground is said to relate to the Basic Award, the following applies. The First Respondent refers to alleged solicitation by the Claimant which the First Respondent says is clearly evidenced in an email dated 8 July 2022 to the relevant client in which she states “in order to for your file to be transferred with me, you will need to sign a file release form, which I will send to you via Adobe sign.”. This email was not provided to the Tribunal in the Remedies Hearing, because the First Respondent says it has only just been discovered. However, as was made clear in paragraph 45 of the Reserved Remedies Judgment, only conduct predating the Claimant’s resignation (9 June 2022) can be relevant to a reduction to the Basic Award pursuant to section 122(2) of the Employment Rights Act 1996. As the First Respondent states in its reconsideration application, it is still the case that “It is not clear when the Claimant solicited this particular client”, (as it was at the date of the Remedies Hearing). This new evidence relates to a date after 9 June 2022, and the position remains that this alleged conduct cannot be proven to have taken place before the Claimant’s resignation. Therefore this new evidence does not change the position set out in paragraph 45 of the Reserved Remedies Judgement. The First Respondent also appears to ignore the fact that once there has been a fundamental breach of contract, which has been accepted by the other party, the party accepting the breach is no longer bound by the terms of the contract (including non-solicitation obligations).

[12]In relation to the third ground, the First Respondent appears to have misunderstood an award being expressed as a gross amount and a requirement to pay a sum without deduction.

Conclusions

[13]Having carefully considered the First Respondent’s application, and bearing in mind the importance of finality in litigation and the interests of both parties, I am not satisfied that there is any reasonable prospect of the Judgment or any part of it being varied or revoked. The application for reconsideration is therefore refused.

Discussion

[14]For these reasons, in my judgment, the Respondent’s appeal on the basis that damages for breach of contract should be ordered on a net basis is wrong in law.

Conclusions

[15]Having carefully considered the referral from the Employment Appeal Tribunal, and in the absence of any submissions being made by either party (in particular the First Respondent who makes the appeal), I am not satisfied that there is any reasonable prospect of the Judgment or any part of it being varied or revoked as it appears to me that the approach of awarding the sum on a gross basis was correct in law. As set out above, it would not have been correct to award the bonus sum net of tax. It is hoped that the further explanation set out above is of assistance to the Employment Appeal Tribunal.

[16]For the reasons set out above, I do not reconsider the Judgement on my own initiative.