Mr A Williams v The Westbury Hotel Ltd: 2200385/2020
EMPLOYMENT TRIBUNALS
Case No 2200385/2020
Between
Mr A WilliamsClaimantThe Westbury Hotel LtdRespondent
Before
Employment Judge P Klimov, sitting aloneDate 19 April 2021
JUDGMENT
[1]The claimant was unfairly dismissed by the respondent (section 94 Employment Rights Act 1996).[2]The issues of compensation, includinga. mitigation,b. the amount of any reductions in relation to contributory fault or under Polkey v. AE Dayton Services Ltd [1987] UKHL 8, orc. the amount of any increase under Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 shall be determined at the remedy hearing on 21 December 2020.
REASONS
The Law
[1]The issues for the tribunal to determine are set out in the agreed list of issues appended to this judgment as Annex A. This judgment determines issues 1 to 8, issues 9 to 12 will be finally determined at the remedy hearing on 21 December 2020. History of proceedings[2]By a claim form presented on 31 January 2020 the claimant brought a complaint of unfair dismissal. The claimant seeks compensation and an uplift of 25% due to the respondent’s alleged unreasonable failure to comply with ACAS Code of Practice on Disciplinary and Grievance Procedures.[3]The respondent admits that it dismissed the claimant. It denies that the dismissal was unfair. It avers that the dismissal was by reason related to the claimant’s conduct and that in all the circumstances the dismissal was fair.[4]In the alternative, it avers that if the dismissal was found to be procedurally unfair:(i) the claimant would have been dismissed in any event;(ii) the claimant contributed overwhelmingly to his dismissal and any compensation awarded should be reduced to reflect the claimant’s contributory fault, and(iii) the claimant shall be put to strict proof of any and all losses occasioned by his dismissal, including his attempts to mitigate such losses.[5]The claimant was represented at the hearing by Ms Tutin (of counsel) and the respondent by Mr Mitchell (of counsel). I am grateful to both counsels for their cooperation and assistance to the tribunal in dealing with this case.[6]The respondent called two witnesses, Mr Heinrich Dominici, the former Hotel Manager of the respondent, and Mr Andrew Henning, the former General Manager of the respondent. Both gave sworn evidence and were crossexamined.[7]The respondent submitted a witness statement of Ms Liliana Gutierrez, the former Director of Human Resources of the respondent, but did not call her to give sworn evidence. The respondent confirmed that it was not seeking postponement or a witness order in relation to Ms Gutierrez. Mr Mitchell submitted her witness statement as a written representation under Rule 42 of the Employment Tribunal Rules of Procedure, acknowledging that since her evidence was not tested on cross-examination, the statement should carry less weight.[8]The respondent also submitted on the first day of the hearing a witness statement of Mr Francesco Antanazzo, HR Officer of the respondent, and sought the tribunal’s permission to admit his evidence. The claimant opposed the application, arguing that the tribunal order of 28 July 2020 stated that all witness statements must be exchanged no later than 5 October 2020 and no other witnesses may be called at the hearing “except with special permission of the tribunal”. The claimant said that the statement had only been served on Friday, 13 November 2020, in the afternoon and with no explanation for the lateness. The claimant argued that allowing the statement at this stage of the proceedings would be prejudicial to the claimant’s interests and that the respondent conduct in presenting the witness statement that late was unreasonable.[9]Mr Mitchell for the respondent argued that it was a very short witness statement, which deals with the events following the claimant’s dismissal. It was relevant to the remedy issues only. Both parties were technically in breach of the tribunal’s orders, as the exchange of other witness statements did not happen until 8 October 2020. He offered the claimant the opportunity to cross-examine Mr Antanazzo in relation to the investigation, disciplinary and appeal meetings, at which he was the note-taker. Ms Tutin said she did not wish to cross-examine Mr Antanazzo on those matters.[10]Mr. Mitchell further submitted that any possible prejudice to the claimant could be addressed by cross-examining the witness, that it was the tribunal’s role to do justice to both parties, and that it would be prejudicial to the respondent’s case on remedies if the evidence related to the restaurant’s closure staff redundancies were excluded. He pointed out that the claimant had served an updated schedule of loss late and the respondent did not raise any objections to that. Finally, he argued that the claimant would not have to incur any additional costs as a result of the statement being admitted.[11]I balanced the reasons advanced by the parties and decided to give permission for Mr Antanazzo to give evidence for the following reasons. His witness statement is short (13 paragraphs), it deals with the events after the claimant’s dismissal. These events are relevant for the tribunal to determine the issues of remedy, there is no clear prejudice to the claimant, which could not be addressed by cross-examining Mr Antanazzo, no additional disclosure will be required, on the claimant’s proposed timetable the issues of remedy were due to be heard on Friday, in four days’ time, which should give the claimant’s counsel sufficient time to take necessary instructions and prepare.[12]The claimant gave sworn evidence and was cross-examined. The claimant also presented a witness statement of Mr Tom Booton, the former Sous and then Head Chef at the restaurant. The respondent accepted Mr Booton’s evidence and did not wish to cross-examine him. I accepted Mr Booton’s evidence as given under oath.[13]I was referred to various documents included in the bundle of documents of 390 pages, which the parties introduced in evidence. In the course of the proceedings the respondent disclosed a further four documents, which I read, and on which contents the respondent’s witnesses were cross-examined.[14]During the claimant’s cross-examination Mr Mitchell showed the tribunal CCTV footage related to the lunch event on 28 July 2019. There were some minor technical issues with the playing of the footage, which made it run a little staccato. After the hearing I watched the footage on my computer, and I am satisfied that I saw all the parts of the footage that Mr Mitchell wished me to watch fully and clearly.[15]The hearing was originally listed for five days. At the beginning of the hearing I discussed with the parties the timetabling. I decided to adopt the timetable proposed by the claimant. The hearing was split into three parts - to deal with the issues of liability first (days 1 to 3), deliberation and decision on liability (day 4) and remedy (if required) on day 5.[16]At the conclusion of the liability hearing I decide to reserve my judgment on liability and relist the remedy hearing (if required) for a later date. By agreement, the remedy hearing (if required) was listed for 21 December 2020. The parties agreed that the claimant should provide to the respondent mitigation documents by 23 November 2020 and a supplemental witness statement on the issues of mitigation by 30 November 2020.
Findings of fact
[17]The respondent is the operator of a five-star hotel based in Mayfair, London (the "Hotel"). It is owned by Cola Holdings Group Limited, the director of which is Mr Azad Cola. Mr Azad Cola is also the sole director of the respondent. His father, Mr. Bakir Azad was a director of the respondent and Cola Holdings Group Limited until 30 March 2012. Since 2017, the Hotel has been part of the Luxury Collection by Marriott International franchise.[18]The claimant is a Michelin-starred chef. During his 36 years’ career in the hospitality industry he has worked in various prestigious restaurants in the UK, France and the USA. Prior to joining the respondent, the claimant worked as the Head Chef at “Marcus Wareing at the Berkley”, a two Michelin-starred restaurant.[19]In or around June 2010, the claimant was told that the owners of the Hotel were interested in recruiting him to run the Hotel’s restaurant. The Hotel had a fivestar ranking at the time, and the owners wished to gain accolades for the main hotel restaurant, such as a Michelin star and more AA rosettes. The owners sought to address this issue by finding a suitable executive head chef to take over the running of the restaurant rather than have the restaurant run by the Hotel’s management.[20]Mr Azad Cola, and his father, and the then Hotel’s General Manager, Mr Zeljko Stasevic ate the claimant’s food at the Marcus Wareing at the Berkeley restaurant on several occasions and decided to offer the claimant the opportunity to the run the restaurant.[21]The negotiations over the claimant’s employment continued over a period of five months, resulting in the parties signing the claimant’s employment contract on 23 November 2010.[22]It was Mr Azad’s wish that the restaurant had the claimant’s name, however he rejected the claimant’s request to make him an equity partner in the restaurant business.[23]The claimant commenced his employment with the respondent in January 2011. There is a disagreement between the parties as to the exact start date, however it is not material for the issues I need to determine.[24]The restaurant was refurbished and opened to the public on 28 November 2011 under the name “Alyn Williams at the Westbury”. It soon started receiving many recognitions and accolades, including an entry into the AA restaurant guide with a three-rosette award, gaining a fourth rosette three years later. In October 2012, the restaurant was awarded one-star rating in the Michelin guide, which it kept for the entire period of the claimant’s employment.[25]From January 2011 until May 2018 the claimant worked full time at the restaurant, and in addition to preparing food, was responsible for all aspects of the running of the restaurant, including, recruiting staff, designing the look of the dining room, choosing and ordering all of the fixtures and fittings, redesigning the kitchen layout, ordering kitchen equipment, designing and implementing all of the food menus and setting the standards and the ethos of the restaurant.[26]The claimant was regarded as the ambassador and the face of the restaurant and had a great deal of control and autonomy in the running of the restaurant. That was accepted by Mr Henning in his evidence.[27]The claimant tried to engage Mr Azad Cola in the details of the restaurant business but was told by Mr Cola that he was not interested in the details and just wanted the claimant to make a success of the restaurant. Mr Cola told the claimant that he was the expert, and that Mr Cola wanted the claimant to see the restaurant as his own. The Wild Rabbit[28]In November 2017, the claimant accepted an offer to join the Wild Rabbit restaurant in Oxfordshire in the position of Chef/Patron. He informed Mr Azad Cola and Mr Stasevic of his intention to leave his job at the respondent. It was agreed in subsequent discussions between the three of them that the claimant would stay involved in the restaurant, acting as a consultant and remaining “the figurehead” of the restaurant until the Hotel closed for refurbishment, which was planned for the end of 2018.[29]The arrangement was then extended to become open ended, as the planned closure had been delayed until the end of 2019. It was also agreed that the claimant would put in place a team to continue running the operations to the same standard, that he would come to the restaurant each week, make himself available for advice at any time, and stay in regular contact with the acting head chef (Tom Booton) and the management of the restaurant (Chris Bakowski). Mr Cola agreed that the claimant would continue to be paid his full salary.[30]The claimant continued to be involved in the restaurant matters during his time at the Wild Rabbit, which he joined in May 2018. For personal reasons in October 2018 he reduced his time at the Wild Rabbit to two days a week, spending three days a week at the Hotel’s restaurant, and eventually left the Wild Rabbit at the end of January 2019 and returned to the restaurant on a full time basis. Management Changes at the Hotel[31]When the claimant joined the respondent in January 2011, Mr Stasevic was the General Manager, to whom the claimant reported. Mr Stasevic left the Hotel in January 2016 for another job at the Cola Hotels Group. Mr Ashley Cole, who until then was Mr Stasevic’ deputy, became the General Manager. He left the Hotel in October 2017 and Mr Stasevic returned to the Hotel as the General Manager for a short period until the new General Manager, Mr Andrew Henning, was appointed in January 2018.[32]In 2017 the Hotel became part of the Starwood Luxury Collection as a franchisee of Marriott Internationals. Mr Henning had previously worked within the Marriott and Starwood groups. After Mr Henning’s arrival further management changes took place at the Hotel, including the appointment in March 2018 of Mr Heinrich Dominici as the Hotel Manager and a deputy of Mr Henning and Ms Lilliana Gutierrez as the Human Resources director. Both previously worked in the Starwood group.[33]Mr Dominici told the tribunal that he had been hired because of his previous work in the Starwood Luxury Collection group with the task to bring the running of the Hotel to the standard expected of a member of the Starwood Luxury Collection. Mr. Dominici admitted that the changes that had been taking place at the Hotel had resulted in most of senior personnel leaving or being dismissed. He also confirmed that the decisions concerning recruiting and dismissing senior personnel at the respondent were not taken without Mr Cola’s approval.[34]On 14 November 2018, Mr Henning called the claimant and asked him to assume wider responsibilities in the Hotel food and beverage operations because Mr Henning thought that the claimant had to do more to justify his salary, and that Mr Booton was largely fulfilling the claimant’s role as the Head Chef. The claimant refused. He said that he wanted to concentrate on further improving the restaurant with the aim of achieving second Michelin stars. Lunch on 28 July 2019[35]On Sunday, 28 July 2019, the claimant used the restaurant to host a private lunch for his friends and family, including his children. He brought his food and drinks and used the restaurant kitchen to cook a meal.[36]Before staring at the kitchen, the claimant set up in the main area of the restaurant an improvised football goals, using two restaurant’s armchairs and a small net he had brought with him. Two young boys started to play with a small soft ball kicking it into the improvised goals. Their play involved the following activities:(i) jumping over the net,(ii) kicking and throwing the ball against the walls and the ceiling,(iii) fighting for the ball and chasing each other around the restaurant,(iv) diving onto the sofa-bench to catch the ball, which stood next to the tables laid for breakfast,(v) taking a running jump onto the sofa-bench,(vi) wrestling with each other on the sofa-bench,(vii) doing a headstand on the sofa-bench.[37]One of the boys took from the bar a small bottle of tabasco sauce and drank some sauce by dipping it from the bottle into his mouth. The other boy on 14 separate occasions took, using his hand, and ate sugar cubes from the sugar bowls on the tables laid for breakfast. On one of those occasions he took a sugar cube after wiping his nose and on another occasion after scratching his groin through trousers.[38]The claimant’s guests were allowed into the kitchen to watch the claimant cooking. They did not take part in the cooking of the meal.[39]One of the guests came into the main area of the restaurant and went through several drawers and the cupboard of the service station, searching for something. She did not take anything from the drawers or the cupboard and returned to the kitchen. A few minutes later the claimant came to the service station and searched the drawers and the cupboard. He did not take anything from the drawers or the cupboard.[40]The events in the restaurant were captured on CCTV and used as evidence against the claimant in the disciplinary proceedings.[41]No damage was done to the restaurant’s fixtures and fittings by the children or the claimant or his guests.[42]The lunch on 28 July 2019 was not the first occasion when the claimant used the restaurant to host a private event. I accept the claimant’s evidence that since joining the respondent and before the lunch on 28 July 2019 he had done so on 61 previous occasions. I also accept his evidence that the private use of the restaurant was agreed between the claimant and the former Hotel’s management (Mr. Stasevic and Mr Shaw) on the condition that after the use the claimant must clean the kitchen and the dining area and everything must be put in the same condition, all rubbish removed, all equipment cleaned and polished, and that there was no need for the claimant to ask permission from the General Manager to use the restaurant for a private event on each such occasion, so long as those conditions were respected.[43]After each such use the claimant put everything in order and thoroughly cleaned the kitchen and the dining room and all kitchen equipment he used. I accept the claimant’s evidence on this, as further corroborated by the evidence of Mr Booton.[44]I also accept the claimant’s evidence that he did not know that under the new management such use was no longer permitted or that he had to seek permission of the General Manager on each such occasion, and that had he been told to stop using the restaurant for private events he would have immediately done so.[45]Mr Henning and Mr Dominici were aware that the claimant had been using the restaurant for private events. The respondent’s evidence is that on 11 March 2019 Mr Rodriguez, the Hotel Security manager, told them that the claimant had been seen by a security officer on patrol having a private dinner in the restaurant on 10 March 2019.[46]The claimant says he was not in the restaurant on that date. The restaurant’s access log does not show that the claimant entered the restaurant on that date. However, the claimant admits using the restaurant for a private dinner on 3 March 2019.[47]On the balance of probabilities, I find that the correct date is 3 March 2019 and Mr Rodriquez told Mr Henning and Mr Dominici of the use the following Monday, 4 March 2019, and the 10th March date in the security report was incorrect. I find this because the security report is not a contemporaneous document, it was prepared on request of Ms. Gutierrez more than five months later, on 19 August 2019.[48]In any event the difference of seven days is not material. Both Mr Henning and Mr Dominici accepted that, as early as March 2019, they knew that the claimant had been using the restaurant for hosting private events and neither of them had told the claimant that such use was unacceptable and must be stopped.[49]Mr Rodriguez told Mr Henning and Mr Dominici that the reason the security officer had not reported the matter as a security incident in March was because he had seen such events happening in the past and there was no clear guidance as to whether such use was allowed. Mr Rodriquez sought guidance from Mr Henning and Mr Dominici and was told that they would deal with the issue and speak with the claimant.[50]Neither of them had spoken with the claimant about this until the disciplinary process, which was initiated after the events on 28 July 2019. Mr Dominici said that Mr Henning told him that he would speak with the claimant. Mr Henning said that he had expected Mr Dominici to do that, and because of that confusion neither of them had spoken with the claimant.[51]I do not accept their explanation. They both said that they had responsibility to deal with important staff matters. They both accepted that they regarded the matter as serious (Mr Henning in his witness statement calls them “incidents”) and that it needed to be investigated and dealt with promptly. They were in regular contact with each other. I find that if each of them thought the other person was investigating the “incident”, that person would have asked the other about it, considering the seriousness they claimed they both had attached to it.[52]Furthermore, the claimant used the restaurant to host a private dinner on 17 March 2019 and that was again reported by Mr Rodriguez to Mr Dominici immediately by sending a text message. Mr Rodriguez told Mr Dominici that there had been a complaint of noise coming from children playing in the restaurant and asked what actions should be taken. Mr Dominici told Mr Rodriguez to ask children to keep the noise down but to take no further actions, and that further actions would be taken the next day.[53]The following day Mr Dominici spoke with Mr Henning about the matter and Mr Henning told him that he would raise it with Mr. Cola to clarify whether the private use of the restaurant by the claimant was allowed. Mr Henning admits that he never raised the matter with Mr Cola despite having several opportunities to do so. When he was asked by Ms Tutin why he had not done that, he answered that he could not give any “practical reason”.[54]Mr Dominici said in his evidence that the reason the claimant had not been spoken about was because at that stage no decision had been taken as to whether such use was allowed. Mr Dominici and Mr Henning both admitted that unless the claimant had been told to stop using the restaurant for hosting private events, it was reasonable for the claimant to assume that he could continue to use the restaurant in that way.[55]Before the lunch on 28 July 2019 the claimant hosted another private event on 7 April 2019. The disclosed materials do not provide any details as to that event and the witnesses were not questioned about it.[56]The lunch on 28 July 2019 was not reported by the security to Mr Dominici or Mr Henning. That was done on instructions from Goran, a personal security guard of Mr Cola. Goran had direct access to the Hotel’s CCTV system and was able to see what was happening in the restaurant. Goran is not an employee of the respondent. Mr Dominici said that he thought that the reason him and Mr Henning had not been informed by the security was because Mr Cola wanted to “test” them to see if they were aware of the same. Mr Henning admitted that it was possible and said that based on his experience it was not normal that the Hotel’s CCTV system was accessible by someone, who was not an employee of the Hotel. Mr Dominici’s suspension and Mr Henning’s meeting with Mr Cola[57]On 15 August 2019, Mr Dominici was informed by Mr Bakowski, the restaurant manager, that Mr Cocking, property director at Cola Hotels, had instructed Mr Bakowski to remove a cable to the sound equipment system because the cable was taped to the floor and Mr Cocking considered that to be a health & safety hazard. Removing the cable meant that no music could be played at the restaurant. Mr Dominici told Mr Bakowski to reinstall the cable.[58]Mr Cocking complained to Mr Cola that Mr Dominici and Mr Bakowski had reinstalled the cable. Mr Cola called Mr Dominici. Mr Dominici said that he could not recall what Mr Cola had told him as the call was only 10-20 seconds long but recalls that Mr Cola was very upset with him about the cable matter and that he had not taken proper actions in relation to the claimant and his family “playing football” in the restaurant on 28 July 2019.[59]Following that call from Mr Cola, Mr Dominici deleted all his text messages on his work telephone. He explained that he had done that because he thought he would be leaving the respondent and would have to return the telephone and did not wish his private messages to be read by the respondent.[60]On 16 August 2019, Mr Dominici was suspended by the respondent until further notice pending investigation into an allegation of breaching Health and Safety Regulations. Mr. Bakowski was suspended, a day earlier and appealed his suspension, the appeal was denied.[61]Mr Henning was on holiday at that time. He recalls Ms Gutierrez calling him about the matter and telling him that Mr Dominici would be suspended. Mr Henning agreed with the suspension. He admitted that he had thought that the issue had been made bigger than what he had anticipated, but the suspension was a “sensible thing to do” due to there being “a lot of tension”.[62]On 18 August 2019, Mr Dominici wrote a letter to Mr Henning and Ms Gutierrez protesting his innocence and explaining why he had told Mr Bakowski to reinstall the cable. In that letter Mr Dominici writes [my emphasis]: Randomly I met Mr Antonazzo and Mr Rodriquez together in front of the HR office and Mr Rodriquez told us that he has been instructed to suspend the person who plugged in the cable in Alyn Williams restaurant. While having this conversation, I made Mr Henning aware of the situation and shortly afterwards I witnessed from the distance that Mr Antonazzo has been contact by Mr Cola directly. I therefore decided to keep myself out of any investigation by the Human Resources department, reinsuring only that the instructions I have been given by Mr Cola, are fully executed. […] Coming back to the second allegation that I have not taken proper action on Mr Williams and his family playing football in the restaurant on a Monday or Sunday in July. It is very difficult being accused of something, I haven’t been informed of it at all. I just learned about this in pits (sic) and pieces firstly from Mr Cola, and afterwards from Mr Rodriquez and Mr Antonazzo. As far as I heard of, there is some video footage available, showing two kids playing soccer in the restaurant while it is closed. Until this Thursday, I have had now (sic) information that this happened in July. There was no report from security, nothing is tracked on diligence and if it happened on a weekend, I even haven’t received any comment via Front Office from the Duty Managers. In short, it opens up a series of questions why this has not been noticed by security, respectively, why this has not been reported to the Hotel Management and the Human Resources department. All signs recommend that proper procedures have not been followed in this case and additional investigations deems necessary. It is beyond my knowledge why this information has not been shared with me and I can only assure you that I would have reported it immediately. […] Mr Rodriquez asked me several times this week about the cameras in the restaurant – as this CCTV system is obviously not connected to the main CCTV system. It might be that his question has a connection with this issue – however, I can only guess, as I still haven’t seen the video footage, or any other evidence until today. […] In conclusion, I sincerely hope that above explanatory notes in connection with the allegations against me, support your investigation and help to explain my movements in those two cases. It is my great pleasure to work for this company and I will be certainly at your disposal for any further questions in this regard.[63]After the suspension of Mr Dominici, Mr Henning had a telephone conversation with Mr Cola. Mr Henning said he could not recall the exact date of that conversation, however shortly thereafter he went to meet Mr Cola in Monaco, where he lives. Mr Henning said that he could not recall what exactly Mr Cola had said to him but admitted that the restaurant “misuse” was mentioned by Mr Cola and that he was very “concerned” about that matter. Mr Henning did not inform Mr Cola that he knew that the claimant had been using the restaurant for private events. He also admitted that Mr Cola would not have known of the arrangements to use the restaurant the claimant had had with the previous management. Mr Henning did not inform Mr Cola that he had been planning to seek his guidance on the claimant using the restaurant. Following the telephone conversation with Mr Cola he did not speak with the claimant.[64]Mr Henning met with Mr Azad and Mr Bakir Cola on 20 August 2020 in Monaco. Mr Henning admits that the issue of the claimant’s use of the restaurant was discussed, and that Mr Cola and his father were “clearly upset”. He says he cannot recall the exact words spoken by them, but he accepts that their expectations were that he would deal with the matter “robustly”. He denies that Mr Cola instructed him to dismiss the claimant. He says he reassured Mr Cola that he would deal with the matter appropriately.[65]Upon returning to London, on 22 August 2019, Mr Henning, Ms Gutierrez met with Mr Dominici. There is a note of the meeting, which I reproduce in full, as I find it an important document in understanding the factual background against which the decision to dismiss the claimant was taken [my emphasis]. Meeting with Heinrich Dominici Thursday 22nd August @ 2 pm Present: - Andrew Henning – (General Manager) AH Liliana Gutierrez (Director of HR) LG Heinrich Dominici (Hotel manager) HD …….…………………………………………………………………………………………………………… AH: Welcomed Mr. Dominici to the meeting explaining the points below following his meeting with Mr. Cola on Tuesday 20th August. To set the context: We as a Management team come from a corporate world into a franchise environment and we want to continue with this corporate approach which is right but at the end of the day we can’t forget that we do work for a family, this is the reality and that influence how things are done and how the decisions are made, we have seen this over the time we have been here. Also, what affects all this is prior to Starwood and Marriott taken the Franchise the family has been managing the hotel and having the control over it. For the last couple of years, they have been on remote, they are sitting abroad so it is understandable that they want to make sure that their business is run with integrity and with a very strict follow up. We are aware that they have been let down by the previous management team, so TRUST is not the automatic instinct. Some of it also adds up with the conversations around what the future of the AW restaurant and the impact on the business. The information that filters directly to them of what is going on or not at the hotel that made them feel uncomfortable regarding how much trust they can have in their Management team. Important to strength that the events that happened at the AW restaurant (the use of the restaurant for his personal used) made the owner very uncomfortable as he perceived this as a lack of care from the Management so once more the element of trust is threaten. It is important and very clear from our side that we clarify exactly the duties and responsibilities of our Property Director, Alex Cocking. Who does what, we need to define his role and to emphasise that we are all working together as a team Following these incidents, the owners lost trust in me, lost lot of trust in you, rightly or wrongly and Mr Cola Senior was exceptionally angry at me and I got the sense that this was also a warning for me. Consequently, they don’t want you dismissed but hey do want you to get a warning which will be on the form of a First Written Warning. I reassured him that moving forward I want to be aligned with his expectations and goals, and I want to be immediately aware of all the information that circulates so we can act on it. I want the Hotel to be successful and that our goals as a team are align. Also, this was also a wake-up call for me to act on some of these things with a different approach and set some action points and deal with them with immediate effect. AH: This is my part; do you have any comments? HD: Not, I don’t have any comments. I have not acted against any direction, I was not aware where Alex Cocking responsibilities ends but in the same time, we all work for an environment where we all know that there are some high H&S priorities. I am perfectly aware that I don’t work for Marriott, but I am working for the Cola Family. I have the most transparent intentions as all I want is the success of the business and if this means for me to put in place stricter policies and make our teams comply, I am happy to put all my efforts on this and action this as from tomorrow if necessary. In the same time, I understand perfectly Mr Cola and I know that he was let down in the past by the previous Management team and this cost him probably a lot of money, reason why he is so sceptical about this and every piece of information. Everything we do have a reason behind, and my understanding of the AW event and this was around that period where we were questioning the future of the restaurant, of the Head Chef, Tom Bottom, and his potential departure and the role of Alyn William moving forward. I am actually happy to know that we get information and support so we can try and run the business to Mr. Cola’s expectations, and I do understand the context and agreed. My actions have always been with the good intention and only for the benefit of the company AH: I made the point to Mr Cola that we have still some things outstanding that are important and have a greater risks to the business in terms of H&S priorities than came out of that particular meeting and I said also that I will make sure that Mr Cocking will inform you of all the points and what has been done about and I shall be doing that with Alex next week. Some Actions points: Roles and responsibilities of the Executive Management team, Organisational Structure who is who, company culture values about integrity, doing the right thing and play as a team. Thank you End of meeting[66]On 23 August 2019 Mr Dominici was given a formal written warning “regarding the hotel’s ownership concerns around control and Health and Safety of the hotel”. The letter said that the warning would be placed on his personnel file for 12 months and that in the event of any future misconduct whilst the warning remained live, Mr Dominici “may be subject to further disciplinary action, which might result in a final written warning or dismissal”.[67]The letter said that Mr Dominici could appeal the decision. He chose not to. At the hearing Mr Dominici maintained that he had done nothing wrong and the warning was unjustified, but he had decided there was no point in appealing it. Mr Henning said that he had thought that Mr Dominici had done wrong only to “a small level”.[68]These episodes are clearly relevant to the case, however none of the respondent’s witness mention them in their witness statements and the documents referred to above were not disclosed by the respondent. The tribunal only became aware of these matters during Mr Dominici’s crossexamination when he was questioned about his reasons for suspending the claimant and mentioned his own suspension. That led to further enquiries and disclosure of these documents. Disciplinary investigation[69]On 2 September 2019, the claimant received a letter from Mr Dominici inviting him to an investigation meeting on 3 September 2019. That was the first day that the restaurant was open after a summer break. The letter stated that the respondent wished to discuss concerns that the claimant had used the restaurant as a private dining room for personal guests and allowed children to play in the restaurant. In addition, the respondent alleged that he allowed nonmembers of staff into the kitchen area and non-members of staff to explore company property and for the children to touch, in an unhygienic manner, company goods. A copy of the letter was also sent by Ms Gutierrez to the claimant by email. The decision to initiate a disciplinary investigation was taken by Mr Henning, which was confirmed by him in his evidence.[70]Mr Dominici’s letter said that the claimant would be able to watch CCTV footage and “the enclosed report from the hotel security”. In his witness statement Mr Dominici says that he enclosed the security incident report with the invitation letter. The claimant says that he did not see the report until it was disclosed in these proceedings.[71]I find that the report was not sent to the claimant because:(i) Ms Gutierrez’s covering email to the claimant in which she attached the invitation letter did not appear to also attach the security incident report.(ii) The report contains important reference to the previous use by the claimant of the restaurant on 10 and 17 March 2010 and the management knowledge of that and yet there are no reference to the report or those events being discussed in the investigation or the subsequent disciplinary and appeal meetings.(iii) The report says that the incident on 28 July 2019 was not reported neither to the General Manager nor the Hotel Manager “as per Goran request”. The claimant did not know who Goran was and yet there are no discussions at any of the meetings about who Goran was and his role in the matter.(iv) On cross-examination Mr Dominici said that he did not know whether the report had been enclosed or not.[72]The claimant attended the investigation meeting with Mr Dominici the next day. Mr Dominici said that it was an investigation meeting, and that his role was to find out what happened and that he had a total of 51 questions he wanted to ask of the respondent. He explained that the respondent was investigating that the claimant had hosted a lunch on 28 July 2019 without asking permission. The claimant tried to explain that historically he had been allowed to use the restaurant without needing to ask permission. Mr Dominici stopped him by saying that he was going through the questions and any additional questions or comments would have to be made at the end. The claimant said that if he knew he was required to ask permission to use the restaurant for private purposes, he would have done so. Mr Dominici did not enquire further into the claimant’s assertion about him having the permission.[73]Mr Dominici showed CCTV footage of the claimant and his guests using the restaurant on 28 July 2019. He was asked questions regarding guests in the kitchen and children playing in the restaurant.[74]At the end of the meeting, Mr Dominici instructed the claimant not to attend work. The claimant explained that the restaurant was due to open the next day, following the summer break, and that he needed to be there for the final preparations. Mr Dominici told him that this was non-negotiable. Mr Dominici did not explain to the claimant reasons for the suspension and did not provide him with a letter of suspension. Mr Dominici said in oral evidence that he was advised to suspend the claimant by the respondent’s solicitors.[75]Mr Dominici said that the reason he had not given the claimant a letter of suspension was because it was not a suspension but instructions not to attend work, however he could not explain the difference between suspension and instructing the claimant not to attend work. He said that he had been told to “go in that direction”.[76]Following the meeting Mr Dominici did not interview anyone nor did he take any other investigatory steps. He did not produce an investigatory report. He sent his notes of the meeting to the respondent’s solicitors and had an “informal” conversation with Ms Gutierrez. He did not take a decision whether there was a disciplinary case to answer. Meeting with Mr Cola[77]On 5 September 2019, the claimant was asked to meet with Mr Azad Cola. Mr Cola was angry and told the claimant that the claimant was disrespectful of the company property, that the claimant acted as if he owned the restaurant and that it was not his restaurant, and that he [Mr Cola] did not ever want to eat the claimant’s food again. He said he would leave it to the Hotel’s HR to decide the outcome. The claimant understood Mr Cola’s words to mean that he was unlikely to work again for the respondent. Disciplinary meeting[78]On 26 September 2019, the claimant was invited to attend a disciplinary meeting on 1 October 2019 to respond to six allegations that the claimant: 1. used the Alyn Williams Restaurant to host a private event, with no prior authorisation; 2. used the Alyn Williams Restaurant and kitchen facilities for personal use without authorisation; 3. allowed children to play in the restaurant or failed to prevent this; 4. allowed children to touch and consume company goods, or failed to prevent this; 5. allowed non-members of staff access to the restaurant kitchens or failed to prevent this; and 6. allowed non-members of staff to access company property unsupervised, including drawers and cupboards, or failed to prevent this.[79]With the letter the respondent sent to the claimant a copy of the notes of his meeting with Mr Dominici and a copy of the CCTV footage, which the claimant could not open to play on his computer. The respondent did not to provide the claimant with a copy of its disciplinary policy until after the meeting.[80]The disciplinary meeting was conducted by Ms Gutierrez. The claimant was accompanied by Mr. Bakowski.[81]During the disciplinary meeting, the claimant denied any wrongdoing and explained that if he had known permission was required to use the restaurant for private purposes, he would have done so. The claimant also explained that he was supervising his guests for the duration of their visit and that no damage had been done to the restaurant.[82]Ms Gutierrez asked the claimant for “anything tangible” to show that he did not need to seek permission. She took the claimant through the CCTV footage. She asked him about the fire procedure suggesting that since no one knew of the claimant’s presence in the restaurant that would be a breach of the fire procedure. The claimant explained that the chance of a fire was very low because the kitchen had an induction stove and that he knew the fire alarm procedure and would have gathered people and took them to the fire point as he had done during the fire drills.[83]Ms Gutierrez referred the claimant to his comment at the investigation meeting that he had thought that the old management was “wild west” and asked the claimant why he had not asked permission of the new management if he had thought that. The claimant first replied with “No answer to that”, but then corrected himself saying that he had not realised that he needed authority from management as he was a manager himself.[84]On 3 October 2019 Ms Gutierrez sent to the claimant a copy of the respondent’s disciplinary procedure, however the last page listing the examples of gross misconduct was missing. Dismissal[85]On 11 October 2019, the claimant was informed by Ms Gutierrez of the decision to dismiss him on the grounds of gross misconduct. He was summarily dismissed without notice or payment in lieu of notice. He was dismissed for gross misconduct on the allegations that the use of the restaurant and kitchen was unauthorised, he allowed children to play in the restaurant and touch company goods, and non-members of staff to access the kitchen and to use the company property.[86]The letter said that each of the six allegations was “well-founded” and that Mr Gutierrez’ decision was that a disciplinary sanction was appropriate and having considered the appropriate disciplinary sanction she decided that summary dismissal by reason of gross misconduct was the appropriate sanction.[87]The respondent did not inform the restaurant staff, or the public about the dismissal of the claimant until late November 2019.[88]On 7 October 2019, the Michelin guide had their annual awards. The restaurant retained its one Michelin star. The claimant says that the reason there was five weeks’ delay between his suspension and dismissal was because if he had been dismissed before the Michelin guide was published the restaurant would have lost its star, as it is the standard practice for a restaurant to lose its status if the chefs leaves. If, however, the chef leaves after the guide was published, Michelin would not get it re-printed, however the restaurant would be removed by Michelin from its website. Mr Dominici confirmed that Michelin guide is very “chefie” and the departure of the chef leads to the loss of the restaurant’s status. Appeal[89]By way of letter dated 18 October 2019, the claimant appealed against his dismissal on several grounds, including:(1) There were numerous flaws in the investigation and the disciplinary process which indicated that the respondent had no real desire to properly deal with his disciplinary: (a) The respondent at the start of the matter did not properly explain the process that would be followed or the implications of his suspension. The claimant was not provided with a copy of the respondent’s disciplinary procedure until after he had attended the disciplinary hearing; (b) The investigation was limited to CCTV footage of the restaurant and was lacking in substance and evidence; (c) There was no investigation report provided despite the claimant being instructed to remain away from work for 6 weeks whilst the investigation was taking place; (d) There was unreasonable delay in investigating the matter and pursuing the disciplinary considering the only evidence used was the CCTV footage in the respondent’s possession; (e) The respondent did not speak with the old management to verify the claimant’s explanation that he had used the restaurant in the same way previously without being challenged or criticised by the respondent.(2) His suspension was unlawful as there was no reasonable basis to suspend the claimant, and the suspension was a very heavy-handed treatment done without the respondent following ACAS guidance.(3) Ms Gutierrez was not an appropriate person to hear the disciplinary and take the decision, as she was involved in the investigation, and thus was not independent. Further, she had been unduly influenced by the owner of the respondent, Mr Cola, after he left the claimant with the impression prior to the disciplinary hearing that he was unlikely to return to the Hotel. She did not follow a fair or reasonable procedure, which the claimant says shows that her decision was predetermined. (3) Summary dismissal was not justified in circumstances where the respondent’s own disciplinary procedure gave no examples of gross misconduct (the claimant did not see the examples in the respondent’s policy because a copy that the respondent had sent to the claimant after the disciplinary hearing had the last page, where such examples are listed, missing) and the claimant had not been notified of any apparent change in policy regarding the private use of the restaurant and kitchen. He noted that: staff members used the kitchen for personal use regularly; children regularly attended the restaurant and it was not uncommon for them to consume company goods; and non-members of staff also visited the kitchen on a daily basis as part of the kitchen tours offered by the respondent. All those were daily instances in the restaurant, for which no one would be criticised, and which were found Ms Gutierrez as amounting to gross misconduct. Even if the claimant had done something wrong, as it was his first “misdemeanour” it was unreasonable to dismiss him summarily.(4) The respondent had an ulterior motive for dismissing the claimant, namely that it wished to bring in new staff since the change of management following the franchise agreement with the Marriott International, cut cost and run the restaurant in the claimant’ name without paying him a salary. On 25 October 2019 Mr. Henning heard the appeal.[91]Following the appeal, Mr Henning spoke to Ms Gutierrez, Mr Cola and Mr Rodrigues. Ms Gutierrez confirmed that she had been involved at the investigation stage with support of the respondent’s solicitors, she said that she did not have any pre-determined idea as to the outcome. Mr Rodrigues confirmed the claimant had used the restaurant for private purposes with children present in the past and playing “hide & seek” but not football. Mr Cola accepted that he had told the claimant that he was shocked at his behaviour, which he considered disrespectful and that he had lost confidence in him. He also said that he had told the claimant that the matter would be dealt with by HR and they would come to their own conclusion.[92]The claimant’s appeal was rejected by Mr Henning on 15 November 2019. In rejecting the appeal Mr Henning found that all the points made by the claimant were “unfounded”. He found that the investigation was not flawed, the claimant’s suspension was not unlawful, Ms Gutierrez’s role was correct, gross misconduct was a reasonable response in the circumstances and that there was no ulterior motive for the dismissal.[93]After the claimant had been dismissed the respondent continued to use the claimant’s name in the name of the restaurant for several months. That was challenged several times by the claimant’s solicitors. Eventually the respondent agreed to rename the restaurant from January 2020 from “Alyn Williams at the Westbury” to “AW Restaurant”.[94]After the claimant’s departure became public knowledge, Michelin removed the restaurant from its online guide and website and the AA removed all rosettes from the restaurant. The restaurant website continues to promise “MichelinStarred Fine Dinning”.[95]The restaurant closed to the public on 23 March 2020 due to COVID-19.
The law
[96]The law relating to unfair dismissal is set out in S.98 of the Employment Rights Act 1996 (ERA). “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) The reason (or, if more than one, the principal reason) for the dismissal; and(b) That it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this subsection if it – ……. (b) Relates to the conduct of the employee;[97]If the employer shows that the reason for the dismissal is a potentially fair reason under section 98(1), the tribunal must then consider the question of fairness, by reference to the matters set out in section 98(4) ERA which states: Where the employer has fulfilled the requirements of subsection (1), 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]A reason for dismissal is “is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee.” (Abernethy v Mott, Hay & Anderson [1974] ICR 323).[99]This requires the tribunal to consider the mental process of the person, who made the decision to dismiss and to identify the relevant decision maker was. The tribunal must consider “only the mental processes of the person or persons who was or were authorised to, and did, take the decision to dismiss” (Orr v Milton Keynes Council 2011 ICR 704, CA).[100]If the decision is made for more than one reason the tribunal must identify the principal reason. In deciding what was the real reason for the dismissal the tribunal is not restricted in choosing between alternative reasons advanced by the parties. “As it is a matter of fact, the identification of the reason or principal reason turns on direct evidence and permissible inferences from it. It may be open to the tribunal to find that, on a consideration of all the evidence in the particular case, the true reason for dismissal was not that advanced by either side” (Kuzel v Roche Products Ltd 2008 ICR 799, CA).[101]Just because there is misconduct which could justify a dismissal does not mean that the tribunal is bound to find that this is indeed the true reason for the employer’s decision to dismiss. If the employee adduces some evidence casting doubt on the employer’s advanced reason, the employer will have to satisfy the tribunal that its advanced reason was in fact the genuine reason relied on at the time of dismissal (Associated Society of Locomotive Engineers and Firemen v Brady 2006 IRLR 576, EAT).[102]The burden of showing, on the balance of probabilities, a potentially fair reason is on the employer, and it fails to do show that, the dismissal will be unfair. If the tribunal rejects an employer’s asserted potentially fair reason, finding that the reason could not have been the one operating on the employer’s mind at the relevant time, the tribunal is not obliged to go on and ascertain the true reason for dismissal if there is insufficient evidence to do so (Hertz (UK) Ltd v Ferrao EAT 0570/05).[103]The tribunals cannot find a dismissal fair for a reason that the employer could have relied on but expressly decided against (Devonshire v Trico-Folberth Ltd 1989 ICR 747, CA).[104]In a misconduct case, where it has been established that the reason for dismissal was the employee’s conduct, the principles in British Home Stores v Burchell [1978] IRLR 379 apply. The three elements of the test are:(i) Did the employer have a genuine belief that the employee was guilty of misconduct?(ii) Did the employer have reasonable grounds for that belief?(iii) Did the employer carry out a reasonable investigation in all the circumstances?[105]The Tribunal must then determine whether the employer’s decision was within the range of reasonable responses which a reasonable employer could come to in the circumstances. It means that the tribunal must review the employer’s decision to determine whether it falls within the range of reasonable responses, rather than to decide what decision it would have come to in the circumstances of the case.[106]If the dismissal falls within the range the dismissal is fair: if the dismissal falls outside the range it is unfair. Further, in looking at whether dismissal was an appropriate sanction, the question is not whether some lesser sanction would, in the tribunal's view, have been appropriate, but rather whether dismissal was within the range of reasonable responses that an employer could reasonably come to in the circumstances.[107]Where there are problems with the disciplinary hearing itself, those can in some circumstances be remedied by the appeal, even if the appeal is not a complete rehearing, however the procedure must be fair overall (Taylor v OCS Group Limited [2006] IRLR 613).[108]Section 123(6) of ERA states that: “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”[109]If an employer fails to establish a potentially fair reason for dismissal, this does not preclude the tribunal to find that there was contributory conduct by the claimant (Chauhan and anor v Man Truck and Bus UK Ltd EAT 931/94). However, in finding contributory conduct the tribunal must focus only on matters, which are “causally connected or related” to the dismissal (Nejjary v Aramark Ltd EAT 0054/12), and evaluate the employee’s conduct itself and not by reference to how the employer viewed that conduct (Steen v ASP Packaging Ltd [2104] I.C.R. 56). Discussion and conclusions 1) What was the reason for the dismissal?
Discussion and conclusions
[110]The respondent says that it dismissed the claimant for a reason related to his conduct, which is a potentially fair reason under section 98(2) ERA. It relies on the decision of Ms. Gutierrez set out in her dismissal letter to the claimant. It argues that the evidence of the claimant’s misconduct is on CCTV and therefore as a matter of fact is unimpeachable, and that his dismissal was solely connected to his conduct at the lunch on 28 July 2019. It says both of its witnesses dismissed the claimant’s contention that the dismissal was due to costs savings or instructions from Mr Cola.[111]The claimant asserts that his conduct was not the real reason for the dismissal. He argues that the decision to dismiss was pre-determined and/or had nothing to do with any purported misconduct. He claims that the true reason was either due to instructions by Mr Cola to dismiss the claimant (or at any rate the decision was influenced to a very significant factor by the Colas), or because the respondent was looking to cuts costs and decided that it could operate as normal without the claimant.[112]Having considered all the evidence and heard the parties’ submissions I find that the respondent failed to show that the decision to dismiss the claimant was for a reason related to his conduct. On the balance of probabilities, I find that the true reason for the claimant’s dismissal was because the respondent’s management (that is Mr Henning and/or Ms Gutierrez) was either directly instructed by Mr Cola to dismiss the claimant or they had understood that Mr Cola wished the claimant to be dismissed and felt obliged to do that to meet Mr Cola’s expectations and regain his trust and fearing repercussions for themselves if they failed to carry out his wishes. I conclude this for the following reasons.[113]The dismissing officer of the respondent was Ms Gutierrez. It is her mental process that led to the decision to dismiss that I need to examine to determine what was the reason she took that decision. Mr Mitchel in his closing skeleton argument expressly states that “[t]he Respondent relies on the decision of LG [Ms Gutierrez], which is set out in her decision letter that followed her disciplinary hearing with C [the claimant]”. I also considered the mental process of Mr Henning as the appeal manager, who decided to uphold the decision to dismiss.[114]The respondent chose not to call Ms Gutierrez to give evidence. Instead, it presented her witness statement as a written statement to the tribunal. Ms Gutierrez signed her witness statement on 13 November 2020, the last working day before the first day of the hearing. The respondent did not provide any explanations as to why Ms Gutierrez was not giving evidence in person and did not seek postponement or witness order. I do not know whether Ms Gutierrez’s non-attendance was due to a sudden change of heart on her part or due to the respondent’s decision not to call her because of concerns what evidence she might give when cross-examined. In any event, without hearing from Ms. Gutierrez directly I must decide what was the true reason in her mind when she took the decision to dismiss the claimant by looking at other available evidence and drawing permissible inferences from those.[115]The respondent submits that Ms Gutierrez statement is factual and is based on what is recorded in the notes of the disciplinary hearing, the accuracy of which was not challenged by the claimant and therefore there is no basis to impugn her statement. This, however, does not help me to determine why she decided to dismiss the claimant. Her statement is very brief on the question of her decision to dismiss and does not explain in any detail why she thought dismissal was the appropriate sanction and what factors she considered in arriving at that decision. The statement does not contain any evidence concerning internal management discussions related to this matter. It completely omits to mention Mr Dominici’s suspension and the meeting between Mr Dominici, Mr Henning and Ms Gutierrez on 22 August 2019. It does not explain why Ms. Gutierrez requested Mr Rodriguez to provide the security incident report of 19 August 2019. All these questions are very relevant in the enquiry as to the reason why she decided to dismiss the claimant, and she could have been asked those questions if she had appeared as a witness.[116]Her letter of dismissal is equally devoid of any such detail. It goes through the six allegations finding each of those well-founded. It does not explain why those findings turn the allegations into gross misconduct and why she decided that summary dismissal was the appropriate sanction. It does not appear that she has given any consideration to any alternatives to dismissal. She also failed to refer to the relevant background, including whether the respondent had been aware of the claimant’ private use of the restaurant and kitchen and had permitted the same, or the claimant’ length of service, his clean disciplinary record and exemplary performance.[117]Mr Mitchell argues that the reasons recorded in the dismissal letter should not be ignored, just because Ms. Gutierrez is not giving evidence, but on the contrary they should be taken by the tribunal as the reasons for her decision and the tribunal should be cautious to dismiss those. This, however, overlooks the fact that it is for the respondent to show, on the balance of probabilities, that the reason as asserted by the respondent is the true reason, and simply recording it in the dismissal letter is not sufficient to discharge that burden when the asserted reason is disputed by the claimant, and he provides evidence casting doubt on the genuineness of it.[118]The respondent argues that the claimant until the appeal hearing never questioned Ms Gutierrez’ ability to determine the issue and that his criticism of her came after she had made her decision. I do not see how that proves that she decided to dismiss the claimant for the reason related to his conduct. In any event the claimant never accepted that he had done anything wrong, at least to the extent that would justify him being summarily dismissal.[119]Turning to the respondent’s argument that the evidence of the claimant’s misconduct is on CCTV and therefore as a matter of fact is unimpeachable. Even if the evidence show that the claimant was guilty of misconduct, this does not prove that the respondent dismissed him for that reason. The issue of wrongful dismissal is not part of the claimant’s case in these proceedings. Therefore, and for the purposes of the first issue I need to determine, the question is not whether I consider the claimant’s conduct in question to be misconduct, but whether the respondent considered it to be such, and most importantly, whether it dismissed the claimant for that reason. Therefore, I reject the respondent’s contention that the CCTV evidence should be taken on a “res ipsa loquitur” basis, and from which I must necessarily infer that he was dismissed for a reason related to his conduct as captured in that footage.[120]With respect to the respondent’s argument that the claimant’s dismissal was solely connected to his conduct on 28 July 2019. Even if it was so connected, being connected or even solely connected and being the principal reason for which the dismissing officer, Ms Gutierrez, dismissed the claimant are two different things, and the latter cannot be substituted by the former. The issue of the conduct being connected to the dismissal is a relevant consideration, and it also arises in the context of section 123 (6) of ERA (see below), but it is not the determinative factor for the purposes of showing the reason for the dismissal under section 98(2) of ERA. I accept that it has evidential value in determining the first issue, and I did take it into account in arriving at my conclusion.[121]In these circumstances, I must seek to determine the reason for the dismissal from other available evidence.[122]Mr Dominici and Mr Henning accepted in their evidence that all significant staff decisions were taken with approval of Mr Cola. Mr Dominici said that Mr Cola had suspended and dismissed “a few” people. Mr Dominici himself was suspended on direct instructions of Mr Cola. The decision to give Mr Dominici a written warning was made by Mr Cola and his father, as explained by Mr Henning at the meeting on 22 August 2019: “Consequently, they don’t want you dismissed but hey (sic) do want you to get a warning which will be on the form of a First Written Warning.” (my emphasis)[123]Mr. Henning accepted that if the disciplinary process resulted in an outcome, with which Mr Cola disagreed such situation would have been “uncomfortable”. Mr Henning also accepted that the decision to continue to pay the claimant his full salary when he was working at the Wild Rabbit and spending only a day a week in the restaurant was the decision of Mr Cola, and whether or not he disagreed with it he had to accept it. Mr Henning’s account of his meeting with the Colas is telling: Following these incidents, the owners lost trust in me, lost lot of trust in you, rightly or wrongly and Mr Cola Senior was exceptionally angry at me and I got the sense that this was also a warning for me.” Therefore, I find that the respondent would not have dismissed the claimant if that, at the very least, were not what Mr Cola would have agreed with.[124]Mr Henning says that Mr Cola did not instruct him to dismiss the claimant and left it for the HR to decide on the outcome. In support of that assertion he refers to the conversation Mr Cola had with the claimant on 5 September 2019. I accept that in that conversation Mr. Cola told the claimant at the end of the meeting that the matter would be dealt with by HR and that they would decide the outcome. However, in the light of other evidence I do not accept that the statement about the matter being finally decided by HR represents the true position.[125]I say that because the meeting took place after the investigation meeting on 3 September 2019. Mr Dominici admitted that the questions for that meeting had been prepared for him by the respondent’s solicitors. At the meeting he did not deviate from the script. He also admitted that he had been told to suspend the claimant by the solicitors, and those instruction had come to him before the investigation meeting. He admitted that he had sent his notes from the meeting to the solicitors and had not done any further investigation into the matter, and that is despite the obvious lines of further enquiry revealed by the discussion at that meeting, such as the claimant’s assertion that he had been given permission to use the restaurant by the previous management.[126]Ms Gutierrez in her interview with Mr Henning on 4 November 2019 refers to her coordinating the process and giving legal guidance with advice from Nash (Nash & Co Solicitors LLP are the respondent’s representatives in these proceedings).[127]The statement by Mr Cola that it will be left for HR to decide the outcome seems to be contradictory with the statements he made in the same conversation that he had lost confidence in the claimant and that did not ever want to eat his food. I find that in such circumstances the position of the claimant as the Executive Head Chef and the “figurehead” at a Michelinstarred restaurant bearing his name, in the Hotel the Colas considered to be the “crown jewel” (according to witness evidence of Mr Henning and Mr Dominici) of their luxury hotels’ portfolio in London, will not have been left by the Colas for the respondent’s HR to decide upon.[128]I treat with caution Mr Henning’s evidence. In his witness statement he only deals with the appeal and omits to mention such important events as Mr Dominici’s suspension, his telephone conversation with Mr Cola following that, his trip to Monaco to meet the Colas, his meeting with Mr Dominici and Ms Gutierrez on 22 August 2019, the circumstances of the production of the security report of 19 August 2019, the fact that he was meant to clarify with Mr Cola whether the claimant was allowed to use the restaurant and has never done that, the fact that the Colas decided to give a formal warning to Mr Dominici and that Mr Henning felt that he had been given a warning by them to.[129]His selective memory on such important events is puzzling. On the one hand, he says that Mr Cola did not instruct him to dismiss the claimant, however, cannot recall what was said in that meeting. When asked about that conversation on cross-examination he said that Mr Cola was “concerned”, however at the meeting on 22 August 2019 he said to Mr Dominici and Ms Gutierrez that “Mr Cola Senior was exceptionally angry at [him]”. Given the circumstances of that meeting, I would have expected that conversation to have stuck in his memory much better than how it apparently did.[130]Mr Henning equally could not recall details of his telephone conversation with Mr Cola despite that conversation causing him to make an urgent trip to Monaco for a face-to-face meeting with the Colas. He, however, does remember how many times a year Mr Cola ate the claimant’s food (see paragraph 16 of his witness statement). He was evasive and inconsistent in answering questions, often hiding behind “I do not recall”.[131]As was Mr Dominici, who also claimed not to be able to recall details of his telephone conversation with Mr Cola, even though following that conversation he decided to delete all messages on his work telephone, as he was anticipating that he would shortly be parting company with the respondent. His “not sure” answers to straight questions did not score him many credibility points either, thus undermining the veracity of his evidence as a whole.[132]I also find their explanation for doing nothing about the “incidents” on 10th and 17th March 2019 (see paragraph 51) not plausible, which casts further shadow on their credibility as witnesses. Therefore, and despite Mr Mitchell’s rescue attempt in his closing submission to convince me that both Mr Henning and Mr Dominici, having been let go by Mr Cola and having their personal reasons to be unhappy about the respondent, should be seen as very credible witnesses, I am not convinced. I find that it will be unsafe for me to find facts and come to my conclusions relying on their evidence alone or preferring them to those of the claimant and the inferences I can reasonably draw from contemporaneous documents.[133]Further, the respondent chose not to call Mr Cola to give evidence, there was no opportunity to question him on what he meant when he said that HR would decide on the outcome and whether he was told to say it.[134]I am equally sceptical about the genuineness of Ms Gutierrez’ reply to Mr Henning at the meeting on 4 November 2019 that she did not have any predetermined idea and that both of them wanted the investigation to be precise, factual and correct. I find it was anything but precise, factual or correct.[135]I find the disciplinary process from start to finish was superficial, no real investigation was done, the claimant’s suspension was unjustified and mishandled (as Mr Mitchell put it himself – “it was a mess”), important documents, such as the security report of 19 August 2019, were not shared with the claimant, no investigatory report was ever produced, the claimant’s repeated assertion that he had permission to use the restaurant were ignored at every stage of the process, and that is despite the management clearly being aware of that.[136]Mr Henning, as the appeal manager, could have corrected the mistakes made earlier. However, he did not do that. His investigation was equally superficial. Mr Henning did not address the claimant’s question why no one from the previous management had been contacted to verify his assertion that he had been allowed to use the restaurant for private events. Mr Henning’s line of questioning was aimed at making the claimant to admit that what he had done was wrong with emphasis on children playing football in the restaurant.[137]The extent of the enquiry by Mr Henning following the appeal meeting was very limited. He asked only three questions of Mr. Cola, two of Ms. Gutierrez and one of Mr. Rodriguez and did not follow up on the obvious lines of enquiry in the context of the claimant’s appeal grounds. He did not ask Ms Gutierrez why she thought the claimant’s actions amounted to gross misconduct, whether she verified the claimant’s claim that he had been given permission to use the restaurant by the previous management, or why she thought that summary dismissal was the appropriate sanction. He did not ask Mr Cola to explain the purpose of his meeting with the claimant and whether he had had any discussions with Ms. Gutierrez before the meeting. He did not ask Mr. Rodriguez to explain why no actions were taken on previous occasions when the claimant used the restaurant for private events with children playing “hide & seek” and whether children playing “hide & seek” was them behaving in a similar way as was seen on CCTV of the incident on 28 July 2019.[138]He did not conduct the appeal by way of a re-hearing the disciplinary matter but chose to deal with the specific appeal grounds advanced by the claimant. While conducting an appeal by way of a re-hearing is not necessary in all disciplinary cases, where there were clear flaws in the early stages of the disciplinary process and considering the sanction applied by Ms Gutierrez, I find that a full re-hearing was necessary to make the process fair.[139]Having dismissed the claimant’s arguments Mr Henning concluded that the appeal was “unfounded”, and the dismissal decision must stand. He did not independently consider whether the claimant was guilty of misconduct and whether the decision to dismiss was the appropriate sanction in the circumstances. Therefore, the reason for the claimant’s dismissal remained as it was in the head of Ms Gutierrez when she decided to dismiss him.[140]Moreover, I have also considered Mr Henning’s reasons for dismissing the claimant’s appeal and for confirming his dismissal. I find that this was not for a reason related to the claimant’s conduct, but for the reasons set out in paragraph 112 above. To the extent I must attribute Mr Henning’s knowledge to Ms. Gutierrez’ decision to dismiss the claimant (Mr. Henning being her direct manager and the respondent’s General Manager), I find that such attribution only reaffirms my conclusion that the respondent did not dismiss the claimant for a reason related to his conduct, but for the reasons set out in paragraph 112 above.[141]I find this for the reasons explained in paragraphs 119 to 138 and furthermore because Mr Henning admitted that he never informed Mr Cola that he knew of the claimant’s use of the restaurant for private events and that he never told the claimant to stop it. He never asked Mr Cola if such use were to be permitted despite telling Mr Dominici that he would do that. He admitted that Mr Cola would not have known of the use.[142]The record of the meeting on 22 August 2019 clearly sets out the direction for the management that no action can be taken contrary to the Colas’ wishes: ”… we can’t forget that we do work for a family, this is the reality and that influence how things are done and how the decisions are made…. I reassured him that moving forward I want to be aligned with his expectations and goals, and I want to be immediately aware of all the information that circulates so we can act on it. … Also, this was also a wake-up call for me to act on some of these things with a different approach and set some action points and deal with them with immediate effect.”[143]Mr Dominici agrees: “I am perfectly aware that I don’t work for Marriott, but I am working for the Cola Family.”[144]Therefore, I find that none of the three managers (Ms Gutierrez being the direct report of Mr Henning) had any independence in this matter and would not have taken any decision that was contrary to Mr Cola’s wishes. The decisions they were taking were not as a result of them exercising an independent judgment on the matter but were dictated by what they considered necessary to arrive to the predetermined outcome.[145]For the same reasons I find that the decision to dismiss the claimant was not because the respondent thought they could operate without him and was looking to cut costs. While Mr Henning might not have been too concerned about the claimant’s departure, given his apparent views as to the claimant’s value to the business (see paragraph 3433), neither he nor Ms Gutierrez nor Mr Dominici were able to make an independent decision as to the claimant’s future with the respondent, and they would not have dismissed him for that reason, if that was contrary to Mr Cola’s wishes.[146]I asked Mr Henning why the respondent, having decided that the claimant’s conduct was so seriously wrong that the respondent did not want him to be part of their business with immediate effect, but was still happy to be associated with the claimant’s name and continued to trade under it. Mr Henning replied that they had not looked at the matter “in that way”, which I took as suggesting that Mr Henning and other senior managers at respondent never considered that the claimant conduct was so blameworthy that they needed to sever all associations with him.[147]The respondent’s case is that the decision to dismiss the claimant was not made by Mr Cola and therefore, as Mr Mitchell accepted, I cannot attribute Mr Cola’s reasons as to why the claimant should be dismissed to the respondent’s reason for dismissing him.[148]However, if the correct legal position (on the authority of Royal Mail Group Ltd v Jhuti 2020 IRLR 129, SC. as applied in in Uddin v London Borough of Ealing EAT 0165/19) is that Mr Cola’s (him being the ultimate controlling mind of the respondent) reason for which he had decided and caused the respondent to dismiss the claimant should be attributed to the respondent’s decision to dismiss, I find that the dismissal (albeit then it would have been for a reason related to the claimant’s conduct) would still be unfair for the reasons set out below.[149]Given my findings as to the real reason for the claimant’s dismissal, it follows that the respondent has failed to show that it dismissed the claimant for a reason related to his conduct and, therefore the dismissal was unfair.[150]Given my decision on the first issue, I do not need to deal with issues 2 to 6. However, since my decision that the true reason for the dismissal was not related to the claimant’s conduct is based on inferences I had to draw in the absence of direct evidence from Ms Gutierrez, I shall deal with those issues on the basis as if the real reason was related to the claimant’s conduct. On that basis I reach the following conclusions. 2) Did the Respondent conduct a reasonable investigation as was warranted in the circumstances?[151]For the reasons set out in paragraphs above I find the respondent did not conduct a reasonable investigation (see paragraphs 69 to 76 and 135). 3) Did the Respondent have reasonable grounds to believe that the Claimant was guilty of the misconduct?[152]For the reasons set out in paragraphs 42 to 56 and 135 to 146 above I find the respondent did not have reasonable grounds to believe that the claimant was guilty of the misconduct. It was known to the respondent that the claimant had been using the restaurant for private events and those events involved children playing in the restaurant. The respondent failed to investigate the matter until Mr Cola decided that the claimant’s conduct was unacceptable and should be punished. 4) Did the Respondent have a genuine belief that the Claimant was guilty of the misconduct?[153]For the reasons set out in paragraphs 42 to 56 and 135 to 146 above and my conclusions in paragraph 112 I find the respondent did not have a genuine belief that the claimant was guilty of the misconduct. 5) Was the decision to dismiss within the range of reasonable responses open to a reasonable employer on the facts?[154]I find the decision to dismiss was not within the range of reasonable responses open to a reasonable employer. I am not satisfied that the respondent genuinely considered that the claimant’s conduct was gross misconduct, it failed to conduct a reasonable and fair investigation to enable it to come to that conclusion, and it failed to consider alternative sanctions. It failed to take into account the claimant’s clean disciplinary record and his exemplary service. I find that in the circumstances the decision to dismiss fell outside the range of reasonable responses open to a reasonable employer. 6) Did the Respondent adopt a fair procedure?[155]I find that the respondent did not adopt a fair procedure. The outcome was predetermined, and the entire disciplinary process was a “side show”. The stark inconsistency between the treatment of the “incidents” of 10th and 17th March 2019 and the lunch of 28 July 2019 speaks for itself. Mr Dominici and Mr Henning “serving” their warnings, including for not dealing with the lunch matter as Mr Cola thought it should have been dealt with, demonstrates that they lacked independence and were under considerable pressure to achieve the result Mr Cola either expressly communicated to Mr Henning, or Mr Henning thought Mr Cola expected to see. Mr Henning admitted that no thought was given to have the matter investigated and the disciplinary process conducted by other independent individuals. In the circumstances I find that would have been necessary to achieve a fair procedure. In short, I find that after the meeting in Monaco between Mr Henning and the Colas, “the writing was on the wall” for the claimant, and there was nothing he could have said or done during the disciplinary process, which would have made the predetermined outcome any different. 7) If a fair procedure was not used would the Claimant have been fairly dismissed in any event and/or to what extent and when?[156]I find that the claimant would not have been fairly dismissed for a reason related to his conduct in any event. I say that because a fair procedure would have shown that the claimant had been given permission to use the restaurant for private events by the management (which the respondent knew anyhow but ignored) and that should have been taken into account in deciding on the appropriate sanction. Although by facilitating and allowing children to play with a football in the restaurant and leaving them unsupervised, his use of the restaurant on that occasion went beyond what reasonably could have been understood to be allowed by the standing management’s permission, nevertheless, considering the claimant’s long and exemplary service and clean disciplinary record those “offences” were not serious enough for a reasonable employer to decide that the claimant was guilty of gross misconduct and that dismissal was the appropriate sanction.[157]The respondent did not plead in the alternative and did not argue that it would have dismissed the claimant in any event for some other substantial reason (for example, because it lost trust and confidence in the claimant or was put under pressure by Mr Cola to dismiss the claimant) and that such dismissal would have been fair. In the absence of any such submissions and supporting evidence it would be impermissibly speculative for me to find what would have happened if the respondent had sought to dismiss the claimant for such other reason. However, if in dismissing the claimant for such other reason the respondent would have adopted the same or substantially the same procedure as it did for dismissing him for the purported reason of his conduct, I find that such dismissal would still be unfair, because the procedural flaws in that process, which would have made such dismissal falling outside the range of reasonable responses.[158]I understand the respondent intends to argue at the remedy hearing that the claimant would have been either placed on furlough or dismissed for reason of redundancy in March 2020 or November 2020. This issue has not been argued at the hearing on liability and therefore I make no decision on it at this stage. This issue will now be explored at the remedy hearing. 8) If the dismissal was unfair, did the Claimant contribute to his dismissal by culpable conduct?[159]I find the claimant did contribute to his dismissal by culpable conduct. Under section 123(6) of ERA, states that the claimant’s actions must cause or contribute to his dismissal “to any extent” and therefore the claimant’s culpable or blameworthy conduct need not be the sole or even the main cause of the dismissal. I find that the claimant’s conduct, in so far as it relates to him allowing children to play in the restaurant with a football and by facilitating it by setting up improvised goals and by not supervising them properly thus allowing them to engage in other activities which could reasonably be seen in that setting as being objectionable (taking sugar cubes with their hands from sugar bowls on the tables laid for breakfast, jumping wrestling and doing headstands on the sofa-bench) was culpable. I find it went beyond the scope of his permission to use the restaurant to host private events, it was disrespectful and caused offence to the owners of the restaurant. The claimant admits that it was “silly”. He also admits that he did not see children drinking tabasco sauce or picking up sugar cubes and accepts that he would have stopped them if he had. This conduct triggered a chain of events that resulted in the claimant’s dismissal. I do not find that there were any intervening events that broke that causation link. Therefore, I find the claimant’s culpable conduct causally connected to his dismissal.[160]I find that Mr Cola did not know that the claimant had been allowed to by the previous management and had been using the restaurant for private events many times in the past. He also did not know that the current management knew of such use and never told the claimant to stop it. I assume that Mr Cola and his father are reasonable and fair-minded gentlemen. I, therefore, find that there is a strong possibility that their reaction to the claimant’s conduct would have been less extreme if they knew all those facts. Nevertheless, I find that the claimant’s conduct was culpable and contributed to his dismissal by 30%.[161]I wish to emphasise that this finding does not mean that I find the conduct of the two boys blameworthy or culpable. Firstly, I am not sitting in judgment on their conduct. Moreover, I find their behaviour in the restaurant was nothing out of the ordinary and would not have been seen unusual of two young boys at home being slightly bored while their parents entertain guests.[162]Finally, while strongly disapproving the Hotel’s management decisions and actions with respect to the claimant in this case, my judgment should not be read as castigating all former and current employees and managers of the Hotel and the restaurant.[163]Having decided the liability issues, the matter shall now proceed to determine the four remaining issues on remedy.
Discussion and conclusions
[1]The Respondent:a. has acted unreasonably in the way that the proceedings have been conducted by it, in particular by failing to disclose all relevant documents and by giving incomplete evidence to the Tribunal, andb. was in breach of the Tribunal’s order by failing to disclose all relevant documents by the due date. and is ordered to pay to the Claimant a sum of £6,718 in respect of the costs incurred by the Claimant.[2]The Tribunal does not consider that the Respondent’s response had no
Discussion and conclusions
[1]This case was heard on 16,17 and 18 November 2020. On 10 December 2020, the parties were sent my reserved judgment dealing with the liability issues. I found that the Claimant was unfairly dismissed by the Respondent and directed that the issues of compensation be determined at a separate remedies hearing.[2]The remedies hearing had initially been listed for 21 December 2020, however due to the closure of the Tribunal’s offices on 18 December 2020 for health and safety reasons, the hearing had to be postponed.[3]On 7 January 2021, the Claimant’s solicitors made an application for a costs order against the Respondent pursuant to Rules 76(1)(a)-(b) and 76(2) of the Employment Tribunals Rules of Procedure 2013 (the “ET Rules”). The costs order is sought on the grounds that the Respondent and/or its representatives have acted unreasonably in the way that the proceedings have been conducted, its response had no reasonable prospect of success, and/or it is in breach of an order.[4]On 15 January 2021, the Respondent’s solicitors wrote to the Tribunal disputing that there were grounds to award costs and asking the matter to be dealt with at the remedies hearing.[5]The remedies hearing took place on 26 March 2021. Ms M. Tutin appeared for the Claimant and Mr J. Mitchell for the Respondent. They both made cogent and helpful submissions to the Tribunal, for which I am grateful.[6]I have given my oral judgment on the remedy issues at the end of the hearing. I have decided to reserve my judgment on the costs order application. This judgment deals only with the costs order application. The judgment on the remedy issues will be sent to the parties separately.[7]The Claimant submits that the Respondent and/or its representatives have acted unreasonably in failing to comply with its disclosure obligations throughout the proceedings, and their unreasonable conduct has caused the Claimant to incur considerable expense, which could have been avoided. The Claimant argues that if the Respondent had provided proper disclosure, and the documents, which were disclosed by the Respondent only during the liability hearing, (the “Non-Disclosed Documents”) had been disclosed pursuant to the Tribunal’s case management orders in advance of the liability hearing, the liability hearing would not have been required. He says, that is because those documents were key evidence, which led the Tribunal to find that the Claimant’s conduct was not the real reason for his dismissal. Therefore, had the Non-Disclosed Documents been made available to the Claimant in advance of the liability hearing, it would have been clear that the Respondent’s case on liability had no reasonable prospect of success.[8]The Claimant submits that the failure is even more egregious given that the Claimant’s solicitors specifically sought disclosure of various categories of documents, (and the Non-Disclosed Documents clearly fall within a category of the documents requested), but were told by the Respondent’s solicitors that the Respondent was “not in control/possession of any documents requested”.[9]The Claimant further argues that the Respondent unreasonable conduct was further aggravated by the Respondent’s witnesses’ failure to provide a complete and honest recollection of events in their written witness statements and when giving oral evidence.[10]Further and in the alternative, the Claimant submits that the Respondent has acted unreasonably by pursuing a defence with no reasonable prospect of success. He argues that based on the content of the Non-Disclosed Documents and the admissions made by the Respondent’s witnesses on cross-examination, the Respondent knew or ought to have known that there was no reasonable prospect of the defence on the liability issues succeeding, because these matters were or should have been known to the Respondent and his representatives in advance of the liability hearing.[11]While the Claimant accepts that the Tribunal found that he had contributed to his dismissal by culpable conduct to the order of 30%, this, he says, is a matter which pertains to remedy, rather than liability.[12]Finally, as a further alternative ground, the Claimant submits that the Respondent is in breach of the order to disclose all relevant documents, and that is a significant breach, for which no explanation has been provided, and has resulted in a waste of costs for the Claimant and Tribunal.[13]The Claimant seeks a costs order of £20,000 (maximum the Tribunal can award under Rule 78(1)(a) of the ET Rules). He submitted a schedule of costs in the total amount of £23,784.[14]The Respondent denies that it has acted unreasonably in the conduct of the proceedings, or that its defence had no reasonable prospect of success, or that it was in breach of the Tribunal’s orders.[15]It submits that regard should be given to the fact that the disclosure took place in May 2020 when the Presidential Guidance in Connection with the Conduct of Employment Tribunal Proceedings during COVID-19 Pandemic (the “Presidential Guidance”) were in place, and the Respondent, its solicitors and the Tribunal system were impacted by the first lockdown. In those circumstance, the Respondent argues, many practitioners considered that all directions in accordance with the Presidential Guidance were arguably stayed. Further, it was Claimant’s solicitors, who sought to extend the deadline for disclosure, and in the then prevailing circumstances the Respondent’s solicitors’ approach to disclosure was reasonable. In any event, any additional costs that might have arisen, are administrative costs which are not unreasonable, in the circumstances when the Respondent was closed for business and its witnesses no longer working for it.[16]The Respondent denies that it was in breach of its disclosure obligations or otherwise acted unreasonably by not disclosing the Non-Disclosed Documents in advance of the liability hearing. It says that the NonDisclosed Documents “would not have been considered relevant to the claim before the solicitors”. It admits that these matters only came to light during the cross-examination of the Respondent’s witnesses.[17]The Respondent’s also disputes that a costs order can be properly made against it on the grounds of how its witnesses gave evidence to the Tribunal. It argues that when giving evidence they were no longer employees of the Respondent and the Respondent had no control over them. In any event, it submits, although in my liability judgment I found them to be evasive and questioned their credibility, I did not make a specific finding that they lied in their evidence. Further, it was their evidence that helped the Tribunal to make its findings and the decision, and they were willing to produce documents to assist the Tribunal. Therefore, the Respondent argues, the relevant standard for making a costs order on that basis is not met.[18]The Respondent further argues that the consequences of its witnesses’ evasiveness and inconsistency in their evidence have already befallen the Respondent by it losing the case. As to the disclosure issues, the nature, gravity and the effects of those matters are relatively minor to merit a costs order.[19]Finally, with respect to the “no reasonable prospect of success” ground, the Respondent argues that it was entitled to put its case to the Tribunal for determination. It points out that the Claimant did not make any strike out application on the ground that the Respondent’s defence had no reasonable prospect of success and this should be telling, because this was a factual dispute that required judicial determination. Further, it argues, the Respondent was successful in showing that the Claimant had contributed to his dismissal, which further supports the Respondent’s argument that it was proper to place the matter before the Tribunal.[20]As to the quantum, the Respondent submits that there is no correlation between the sought sum of £20,000 and costs incurred as a result of the alleged unreasonable conduct. Therefore, it says, this appears to be an attempt to punish the Respondent for seeking to defend its decision to dismiss the Claimant.[21]To determine the application, I need to answer the following questions:(i) Has the Respondent acted unreasonably in the way it dealt with its disclosure obligations, in particular, by failing to disclose the NonDisclosed Documents before the liability hearing?(ii) Was the Respondent in breach of the Tribunal’s order by not disclosing the Non-Disclosed Documents before the liability hearing?(iii) Has the Respondent acted unreasonably in the way its witnesses gave evidence to the Tribunal?(iv) Considering the matters and event which came to light because of the content of the Non-Disclosed Documents and the admissions made by the Respondent’s witnesses at the hearing, did the Respondent’s defence have no reasonable prospect of success?(v) If I answer “yes” to one or more of the above questions, should I exercise my discretion and make a costs order against the Respondent, considering the nature, gravity and the effect of the conduct in question?(vi) If I decide that a costs order is appropriate, how much costs should be awarded against the Respondent, considering causal connection between the conduct in question and costs incurred?
Findings of Fact
[22]In this judgment I shall set out my findings of fact in relation to the issues pertinent to the costs order application. My findings of fact and conclusions on the liability issues are set out in my liability judgment of 10 December 2020. I shall refer to those where necessary.[23]The Claimant presented his claim on 31 January 2020, and on 7 February 2020 the Tribunal sent the claim form to the Respondent together with the standard directions, which set the deadline for disclosure of documents as 20 March 2020.[24]On 19 March 2020, the Claimant’s solicitors (Fox Williams LLP) wrote to the Respondent’s solicitors (Nash & Co Solicitors LLP) seeking to agree an extension of the disclosure deadline to 20 April 2020 on the grounds that the Respondent’s response had been received only on 13 March 2020, there was a pending application to postpone the hearing date, and in light of the Presidential Directions it was anticipated that the hearing date would be moved and the parties would need to agree new directions.[25]On 16 April 2020, the Respondent’s solicitors replied agreeing to the extension.[26]On 20 April 2020, the Claimant’s solicitors wrote again to the Claimant’s solicitors referring to the announcement from the Presidents of the Employment Tribunals that any case management directions which were due to take place between 23 March and 26 June should no longer apply and informing the Respondent’s solicitors that they would not be ready to exchange documents on that day.[27]On 22 April 2020, the Respondent’s solicitors replied stating that the general consensus was that judges still expected the parties to comply with the directions as far as possible and suggesting that disclosure should take place before the case management telephone hearing listed for 19 May 2020.[28]On 7 May 2020, the Claimant’s solicitors wrote to the Respondent’s solicitors referring to the data subject access request (the “DSAR”), which the Claimant had made earlier, and in response to which the Respondent had disclosed certain documents. The DSAR was handled by another firm of solicitors, Druces LLP. The Claimant’s solicitors enquired whether the documents disclosed pursuant to the DSAR would be included in the Respondent’s list of documents. They also proposed to exchange disclosure lists on 13 May 2020.[29]On 07 May 2020, the Respondent’s solicitors replied agreeing to the exchange date, but saying that there were not aware of the DSAR, and although they would now request the Respondent to provide the DSAR documents there would be insufficient time for them to review those and include in the Respondent’s list of documents for the exchange on 13 May 2020. They suggested that the Claimant should add relevant documents to his list.[30]On 7 May 2020, the Claimant’s solicitors replied expressing their surprise that the Respondent’s solicitors were not aware of the DSAR documents and saying that although they would include relevant documents in the Claimant’s list, it was the Respondent’s obligation to review and disclose all documents relevant to the case. In particular they pointed out that it was “inevitable that data relevant to the proceedings would have been discovered as a result of his DSAR and such data ought to have been provided to you for the purposes of disclosure”, and requested that the Respondent undertook “a thorough search and that all documents are provided to you and disclosed where appropriate.”[31]In concluding, they expressed a concern that the Respondent was not complying with its disclosure obligations, which was prejudicial to the Claimant’s prospect to have a fair hearing and sought the Respondent’s solicitors’ “prompt assurances that your client understands its disclosure obligations and summarise the steps it has taken to search for and obtain relevant documents”, and reserved the right to draw this matter to the attention of the Tribunal at the preliminary hearing “and to make an application for costs at the appropriate time”.[32]On 13 May 2020, the parties exchanged their lists of documents. The Respondent’s list did not include any DSAR documents. The Respondent’s solicitors explained that by them not having time to review the DSAR documents. They stated that they would update the list to include the relevant DSAR documents once reviewed.[33]On 11 June 2020, following the exchange of the lists, the Respondent’s solicitors requested copies of some documents from the Claimant’s list. The Claimant’s solicitors replied on 23 June 2020 providing the documents and again expressing concerns as to the adequacy of the disclosure exercise, because the requested documents had been disclosed to the Claimant pursuant to his DSAR.[34]On 24 June 2020, the Claimant’s solicitors wrote again to the Respondent’s solicitors referring to a document on the Respondent’s list (an e-mail from Gustavo Rodrigues to Liliana Gutierrez dated 20 August 2019 with an attached incident report) and seeking disclosure of various categories of documents, including “All security and/or incident reports and/or any other documented material relating to private events held in the restaurant by our client at any time during the entire period he was an employee of the Hotel”.[35]They also sought an explanation as to why those documents were not on the Respondent’s list, and again raised concerns about the Respondent’s compliance with its disclosure obligations and sought a confirmation that the Respondent’s solicitors had advised the Respondent “of its disclosure obligations and the sanctions in the event it is found to have breached them”.[36]Through July 2020, there were further email exchanges between the parties’ solicitors in relation to disclosure of the requested categories of documents, during which it was agreed that the Respondent’s solicitors would send all such documents by 14 August 2020.[37]On 6 August 2020, the Claimant’s solicitors wrote to the Respondent’s solicitors reminding them of the agreed deadline and asking to confirm that they did not anticipate any issue with complying with it. They warned that they would seek an appropriate order from the Tribunal if the Respondent failed to comply.[38]Having received no reply and no documents, on 18 August 2020, the Claimant’s solicitors wrote to the Respondent’s solicitors again in the following terms (my underlining): You have missed the extended deadline of 14 August 2020 for providing the disclosure documents we requested on 24 June. It is disappointing that you have neither warned us that you would fail to meet this deadline nor provided an explanation as to why you have missed a deadline for which you gave us assurances you would definitely meet. The failure by you and the Respondent to provide us with these crucial disclosure documents is now causing significant prejudice to the Claimant and risks affecting the Tribunal hearing itself. The trial bundle has to be submitted by 7 September and witness statements exchanged by 5 October. The trial bundle is now due in 20 days and we have not yet received all the relevant documents. We have on several occasions expressed our concern about the way disclosure, and the case in general, has been conducted by your firm and the Respondent. Our client has clearly been, and continues to be, prejudiced by your conduct and as a consequence has been unable to properly prepare his case. This is unacceptable and he reserves his right to draw this unreasonable conduct to the Tribunal in due course. If we do not have a full response from you and disclosure of the documents by close of business tomorrow we intend to apply to the Tribunal immediately and without further notice to you for an order for specific disclosure. If this is necessary we will also be seeking a costs order.[39]On 19 August 2020, the Respondent’s solicitors replied saying that they were “still taking instructions from my client in relation to this” and “hoping to have a further call” with the client, following which they would update the Claimant’s solicitors.[40]On 26 August 2020, the Claimant’s solicitors wrote to the Respondent’s solicitors again in the following terms (my underlining): Specific disclosure We note that we have not yet heard from you in relation to the specific disclosure documents which we requested from you on 24 June 2020 and which you gave us an assurance would be provided by 14 August 2020. When the documents were not provided (without warning or apology) as promised, we chased for an update on 18 August 2020. You replied on 19 August 2020 to say that you were hoping to have a call with your client. You have not contacted us since with either an update or the documents which we have requested and your client should have easily been capable of producing in the period of two months since we made our request. This is completely unacceptable and as set out in our e-mail of 18 August 2020, given the tight timetable, the repeated failure of you and your client to provide us with these crucial disclosure documents continues to cause real prejudice to the Claimant and risks affecting the Tribunal hearing. The Respondent’s conduct is wholly unreasonable. If we do not have a full response from you and disclosure of the documents by 4pm on 28 August 2020 we will have no option but to apply to the Tribunal immediately and without further notice to you for an order for specific disclosure. If this is necessary we will also be seeking a costs order.[41]On 28 August 2020, the Respondent’s solicitors replied confirming that the Respondent was “not in control/possession of any of the documents requested”.[42]On 11 September 2020, the Respondent’s solicitors wrote to the Claimant’s solicitors asking for copies of certain documents on the Claimant’s list.[43]On 17 September 2020, the Claimant’s solicitors replied, providing copies of the requested documents, and again expressing their surprise that those documents had been requested as those were the Respondent’s documents. They again raised concerns about significant deficiencies in how the Respondent’s disclosure had been done and reserved the right to raise the matter with the Tribunal.[44]On the first day of the liability hearing during the cross-examination, Mr Dominici, a witness for the Respondent, in responding to Ms Tutin’s question about the reason for him suspending the Claimant, said that he had been suspended himself by the Respondent. That led to further enquiries and disclosure of the Non-Disclosed Documents, which content was highly relevant to the central issues in the case. In fact, the content of the Non-Disclosed Documents, together with the admissions the Respondent’s witnesses had to make in light of those documents, were fatal to the Respondent’s defence on liability. My detailed findings and conclusions on these matters are set out in paragraphs 57 to 68 and 122 to 150 of my liability judgment.[45]I shall further add that when the matter came to light at the liability hearing, the Respondent’s solicitors were able to find and provide the Non-Disclosed Document very promptly, perhaps surprisingly promptly, given their earlier confirmation that their client was not “in control/possession” of any such documents.
The Law
[46]Rule 76 provides: 76(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 that the proceedings (or part) have been conducted; or (b) any claim or response had no reasonable prospect of success.(2) A Tribunal may also make such an order where a party has been in breach of any order or practice direction or where a hearing has been postponed or adjourned on the application of a party.[47]The amount of a cost order a tribunal can make is set out in Rule 78 78.— The amount of a costs order (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; (b) order the paying party to pay the receiving party the whole or a specified part of the costs of the receiving party, with the amount to be paid being determined, in England and Wales, by way of detailed assessment carried out either by a county court in accordance with the Civil Procedure Rules 1998, or by an Employment Judge applying the same principles; or, in Scotland, by way of taxation carried out either by the auditor of court in accordance with the Act of Sederunt (Fees of Solicitors in the Sheriff Court)(Amendment and Further Provisions) 1993, or by an Employment Judge applying the same principles;[48]The following key propositions relevant to costs orders may be derived from the case law.[49]There is a two-stage exercise to making a costs order. The first question is whether a paying party has acted unreasonably or has in some other way invoked the jurisdiction to make a costs order. The second question is whether the discretion should be exercised to make an order (Oni v Unison ICR D17).[50]While the threshold tests for making a costs order are the same whether or not a party is represented, in the application of the tests it is appropriate to take account of whether a litigant is professionally represented or not. Litigants in person should not be judged by the standards of a professional representative (AQ Ltd v Holden [2012] IRLR 648).[51]The meaning of the term “vexation” was given by Lord Bingham LCJ in AG v Barker [2000] 1 FLR 759: “[T]he hallmark of a vexatious proceeding is … that it has little or no basis in law (or at least no discernible basis); that whatever the intention of the proceedings may be , its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant, and that it involves an abuse of the process of the court, meaning by that a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process.” (Scott v Russell 2013 EWCA Civ 1432, CA)[52]“Unreasonable” has its ordinary English meaning and is not to be interpreted as if it means something similar to “vexatious” (Dyer v Secretary of State for Employment EAT 183/83).[53]In determining whether to make a costs order for unreasonable conduct, a tribunal should take into account the ‘nature, gravity and effect’ of a party’s unreasonable conduct (McPherson v BNP Paribas (London Branch) 2004 ICR 1398, CA)[54]Giving false evidence to the Tribunal, while not necessarily must result in a costs order, is a relevant factor to consider in assessing the party’s conduct (Arrowsmith v Nottingham Trent University 2012 ICR 159, CA).[55]In assessing a party’s conduct, the Tribunal can look at it as a whole, to determine whether it amounts to unreasonable conduct (Sahota v Dudley Metropolitan Borough Council EAT 0821/03)[56]While a precise causal link between unreasonable conduct and specific costs is not required, it is not the case that causation is irrelevant. In Yerrakalva v Barnley MBC [2012] ICR 420 Mummery LJ said: “41. The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the Claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited above from my judgment in McPherson's case was to reject as erroneous the submission to the court that, in deciding whether to make a costs order, the employment Tribunal had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. In rejecting that submission I had no intention of giving birth to erroneous notions, such as that causation was irrelevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances”.
Conclusions
[57]Looking at the history of the events related to disclosure, when taken together with my findings as to the true reason of the Claimant’s dismissal and how the Tribunal came to that conclusion, in my judgment, it clearly paints the picture of the Respondent deliberately withholding the NonDisclosed Documents and trying its best to steer its witnesses’ evidence well clear of those critical events and matters.[58]If it were not for Mr Dominici’s “slip of the tongue” these matters might not have come before the Tribunal at all, and the Tribunal would have had to make its decision based on incomplete and indeed misleading evidence of the Respondent’s witnesses, both of whom were well (and indeed uniquely) aware of those critical events and matters.[59]I firmly reject the Respondent’s arguments that the Non-Disclosed Documents were not relevant, and therefore it was proper for them not to be disclosed before the liability hearing. On the contrary, I found them to be key documentary evidence to the central issue in the case, namely the reason for the Claimant’s dismissal. They could only be considered as “not relevant” if one were to accept the Respondent’s case on its face value. However, the liability hearing has shown that it was advanced on a false evidential basis, and quickly crumbled when the Non-Disclosed Documents came to light.[60]I do not accept that the lockdown, the closure of the Respondent for business or the Presidential Directions could in any way excuse or mitigate the Respondent’s failure to disclose those documents. Not only they were properly disclosable on the ordinary disclosure rules, but their disclosure was specifically and repeatedly requested by the Claimant’s solicitors. It was not until the Respondent’s solicitors were warned that a specific disclosure order would be sought, they came back confirming that such documents were not in the Respondent control or possession, which was untrue. I find the Non-Disclosed Documents were within the categories of documents, in respect to which disclosure was sought by the Claimant in his solicitor’s letter of 24 June 2020, and which the Respondent’s solicitors undertook to provide by 14 August 2020.[61]The Non-Disclosed Documents were either created by or addressed to the Respondent’s witnesses. Therefore, I find that it is beyond any reasonable belief that these documents and the events and matters recorded in them would not have been mentioned during the preparation of the Respondent’s pleadings and its witnesses’ written statements.[62]Furthermore, it appears that the Respondent’s solicitors were advising the Respondent on how to run the Claimant’s disciplinary process (see paragraph 126 in my liability judgment). It appears highly improbable that they would not have been aware of such events and matters resulting in the Claimant’s disciplinary process. Yet none of those events and matters were mentioned in the Respondent’s witness statements. I shall leave it at that, as I do not have sufficient evidence to make conclusive findings as to what has gone on between the Respondent and its solicitors. However, it is worth reminding the Respondent’s solicitors that as well as to their client they also owe certain duties to the Tribunal.[63]Just looking at the failure to disclose the Non-Disclosed Documents, I find this is a glaring example of unreasonable conduct. In fact, I do not see how on these facts I can come to any different conclusion.[64]This was also a clear breach of the Tribunal’s orders to disclose all relevant documents, and that would have been known to the Respondent’s solicitors. In the circumstances, in my judgment, such breach by itself justifies making a costs order. I reject the Respondent’s submission that it was “administrative” and “relatively minor”.[65]This unreasonable conduct was further compounded by the Respondent’s witnesses’ evidence, both what went, or to be more precise, what did not go, into their written witness statements and how they were answering questions on cross-examination. My findings on that are in my liability judgment at paragraphs 130 to 131. While it is true that I did not make a specific finding that they lied to the Tribunal, they certainly did not tell “the whole truth” to the Tribunal, as they had sworn to do.[66]Although by itself the conduct of the Respondent’s witnesses at the hearing is not, in my judgment, sufficient for me to find that the Respondent conduct of the proceedings was unreasonable, taking it together with the failure to disclose highly relevant documents further supports my conclusion that the Respondent’s conduct, taken as a whole, was unreasonable.[67]I reject the Respondent’s submission that because the two witnesses were no longer in the Respondent’s employment and it had no control over them, it could not be held responsible for their conduct. They were the Respondent’s witnesses, whose evidence the Respondent put forward in support of its case. Whether they were employed by the Respondent or not and what degree of control the Respondent had over them, in my judgement, is irrelevant.[68]I am equally unpersuaded by the Respondent’s argument that because its witnesses evidence led to further enquiry and disclosure of the NonDisclosed Documents and eventually to the Respondent losing the case, this should be taken as the Respondent acting reasonably and assisting the Tribunal. The discovered matters and events should have been covered in the Respondent’s witnesses’ written statements, and the Non-Disclosed Documents should have disclosed before the liability hearing. The “assistance” only came when the Respondent had no other option but to disclose the documents and its witnesses had to answer questions about those matters and events.[69]I also do not see on what proper basis it could be said that because the Respondent’s witnesses’ oral evidence caused the Respondent to fail to meet the burden of proof to show the reason for the dismissal, thus losing the case, their conduct may no longer be the ground for awarding costs against the Respondent, because, it is said, it has already suffered “the consequences of the conduct of the witnesses”. There is nothing in Rule 76 of the ET Rules to suggest that. Further, if this were true, in my judgment, this would go against the whole purpose of the Rule. If vexatious, abusive, disruptive or otherwise unreasonable conduct, which causes a party responsible for such conduct to lose its case, cannot then lead to a costs order against that party, because such conduct has already caused the party to lose its case, it would be a very rare circumstance indeed when a Tribunal could make a costs order. This cannot be right or intended by Rule 76.[70]It follows that my answer to the questions (i) and (ii) in paragraph 21 above is “Yes”. Although I find that the way the Respondent’s witnesses gave evidence to the Tribunal by itself was not “unreasonable conduct” for the purposes of Rule 76, it is a relevant consideration in assessing the Respondent’s conduct of these proceedings as a whole, which I find was unreasonable.[71]These findings are sufficient for me to move on and consider the nature, gravity and effect of the conduct and decide whether I should exercise my discretion and make a costs order. However, before doing that, I shall briefly deal with the question whether the Respondent’s response had no[72]I accept that the Respondent’s case on all remedy issues, including contributory fault, is properly arguable and all evidence pertaining to those issues were needed to be examined and determined by the Tribunal. However, I find that the Respondent’s case on liability (as it was pleaded by the Respondent), considering the content of the Non-Disclosed Documents and the admissions the Respondent’s witnesses had to make at the liability hearing had no reasonable prospect of success. The Respondent’s case was that it was the Claimant’s conduct that caused the Respondent to dismiss him, and that was the decision of the Respondent’s management, and Mr Cola had nothing to do with that decision. The Non-Disclosed Documents and the Respondent’s witnesses’ admissions on crossexamination, clearly showed that the opposite was true. I find that the Respondent’s case on liability would only have had a reasonable prospect of success if the Respondent had been able to keep those matters concealed from the Tribunal, which would have been unreasonable and improper.[73]Therefore, I find that if the Respondent had disclosed the Non-Disclosed Documents before the liability hearing (as it should have done) and the matters and events recorded in those documents were properly dealt with in the Respondent’s witness statements, its liability case was in the “strike out territory”. The reason that no such application was made by the Claimant is because he was kept in the dark by the Respondent as to the existence of those documents and the events described in them.[74]However, considering the Respondent’s case as a whole, I cannot say that its “response” had no reasonable prospect of success. Even if the liability were admitted, I find that the Respondent had reasonable grounds to argue that the Claimant should not be awarded any compensation under the Polkey principles or due to his culpable conduct. Therefore, I do not consider that the Respondent’s “response”, taken as a whole, had no[75]Returning to the Respondent’s unreasonable conduct issue and considering its nature, gravity and effect, I have no hesitation in finding that it is proper for me to make a costs order against the Respondent. I find that the Respondent’s failure to disclose the Non-Disclosed Documents, and the Respondent’s presenting its evidence in the way that they did not refer and deal with the matters and events described in those documents, was a deliberate attempt to run its liability case on a false evidential basis.[76]Such conduct was not only unreasonable, but it was also calculated to achieve a particular and unjust result. It clearly caused the Claimant to incur unnecessary costs and prolonged the proceedings. I find no mitigating factors, especially bearing in mind that the Respondent has been professionally represented throughout these proceedings and its solicitors have been repeatedly warned that the Respondent must comply with its disclosure obligations.[77]Turning to the issue of how much the Respondent should be ordered to pay the Claimant towards his costs.[78]I accept that if the Respondent had not acted unreasonably certain costs would have been avoided and the liability hearing could have been shortened. However, I do not consider that all of the issues, which had been dealt with at the liability hearing could have been properly dispensed with. Even if the Respondent had admitted liability, the parties’ witnesses would have still needed to be examined and the CCTV footage played to determine the Polkey and the contributory fault issues.[79]However, I find that certain costs would have been avoided if the Respondent had acted properly, including costs of the Claimant’s solicitors having to repeatedly seek disclosure of documents, costs associated with the Claimant having to prepare and run its case based on how the Respondent put its liability defence and without knowing of the existence and the content of the Non-Disclosed Documents. I assess that 1/3rd of the relevant incurred costs was caused by the Respondent’s unreasonable conduct.[80]Having considered the Claimant’s costs schedule and the invoices in the bundle, I assess costs attributable to the Respondent’s unreasonable conduct in the amount of £6,718 and order the Respondent to pay that sum to the Claimant in respect of his costs. In making my assessment I applied the following principles:a. Counsel’s fees related to the remedies hearing (page 207 in the bundle) are excluded;b. Counsel’s fees related to a period before 14 August 2020 (the agreed deadline for the disclosure of additional documents) are excluded (pages 202, 203 in the bundle),c. 1/3rd of Counsel’s fees for the preparation of the Claimant’s witness statements (pages 204, 205 of the bundle) are included - £345,d. 1/3rd of Counsel’s fees for the liability hearing (page 206 of the bundle) are included - £3,000,e. All Counsel’s fees for the preparation of the costs application (page 210 of the bundle) are included - £1,050,f. 1/3rd of the Claimant’s solicitor’s fees (pages 208, 209 of the bundle) are included - £2,323. Total: £6,718.[81]For completeness I should say that I reject the Respondent’s submission that there are no evidence of the Claimant actually incurring the claimed costs. The Respondent suggests that because the principal solicitor dealing with the case is the Claimant’s brother the Claimant might not have been charged any legal fees.[82]Firstly, the Statement of Costs does not contain any fees for Mr Sean Williams (the Claimant’s brother). Further, there are copies of the Counsel’s and the solicitors’ invoices to the Claimant in the bundle (pages 202 - 210). Finally, if it is suggested that the Claimant’s solicitors presented to the Tribunal the Claimant’s Costs Schedule and invoices, where in fact no such costs had been charged to the Claimant, this would be serious misconduct on their part. Considering their conduct during these proceedings, which I find nothing but proper and helpful to the Tribunal, I have absolutely no reasons to think that they would be disposed to do that.
The Law
[83]I reject this. Awarding the Claimant statutory redundancy as part of his “loss of earnings” in addition to the basic award, in my judgment, would be compensating him twice for the same loss. The function of the basic award is to compensate the employee for loss of his or her job security caused by the unfair dismissal. The statutory redundancy pay is a form of recognition of the accrued benefit through continuous service, which the employer must pay the employee when the employee’s job is lost due to redundancy. Both awards are calculated by applying essentially the same formula. Therefore, in my judgment, by making a basic award the Tribunal gives compensation to the employee for him or her losing his/her accrued entitlement to the redundancy pay.[84]Further, under section 122(4) ERA: “The amount of the basic award shall be reduced or further reduced by the amount of—(a) any redundancy payment awarded by the tribunal under Part XI in respect of the same dismissal, or(b) any payment made by the employer to the employee on the ground that the dismissal was by reason of redundancy (whether in pursuance of Part XI or otherwise)[85]I am not aware, and I was not referred to any authority to support Ms Tutin’s contention that in addition to the basic award the Claimant’s compensatory award should include an element of loss calculated as the Claimant’s statutory redundancy pay. I also find that awarding such additional amount will not be just and equitable.[86]I am equally unpersuaded by Ms Tutin’s argument that although the Claimant is not bringing a claim for notice pay, I should award him, as part of the compensatory award, an amount equivalent to his notice pay because it would have been part of his “redundancy package”.[87]In my judgment, awarding the Claimant any compensation for his notice pay, when he brings no such claim (most likely to preserve it to pursue through the civil courts), will be an error of law and also lead to a plainly unjust result. The Claimant would have been compensated for his notice pay and would still retain the right to claim for it again. In my judgment, the position is simple - either he brings a notice pay claim or he does not, and if he does not – he cannot be awarded a compensation for his notice by having it labelled as a “loss of earnings”. Income from mitigation[88]It was accepted by the Respondent that the Claimant took reasonable steps in mitigating his loss and the total income earned in mitigation was agreed by the parties as £24,225.36. However, following the hearing the issue arose as to whether the Claimant should give credit for the whole amount, or the sums earned in mitigation from 1 December 2020 should be reduced by 50% because his losses from that date are reduced by that percentage under Polkey.[89]Ms Tutin argues that if the Claimant can only recover 50% of his actual loss from 1 December 2020 but must give credit to 100% of his earnings during the same period, this will be neither just nor equitable.[90]I disagree. A compensation awarded to the Claimant must cover his losses flowing from the unfair dismissal. The 50% Polkey reduction in relation to the period from 1 December 2020 is applied to reflect the fact that from that moment there was a 50% chance that the Claimant's losses flowing from the unfair dismissal would have ceased, or to put it another way - it is found (applying the Polkey principles) that if the Claimant had not been unfairly dismissed, he would have been in that financial position from that moment onwards. Therefore, in my judgment, the Claimant is compensated not for 50 but for 100% of his losses from 1 December 2020, which are attributable to the unfairness of his dismissal. It is against that sum he must give credit for all sums earned in mitigation after that date, under the usual principles (see Ging v Ellward Lancs Ltd 1991 ICR 222, EAT).[91]If the credit were given only for 50% of the Claimant's earnings after 1 December 2020, the Respondent would be ordered to pay for the Claimant’s losses, which are not attributable to the Respondent dismissing the Claimant unfairly, and that, in my judgment, would not be just and equitable. Is it just and equitable to increase the amount of compensation by up to 25% to reflect any unreasonable failure by the Respondent to follow the Acas Code of Practice on Disciplinary and Grievance Procedures?[92]Ms Tutin submits that in light my findings in the liability judgment, and in particular in paragraphs 151-155, that the outcome of the disciplinary procedure was pre-determined and that there had been numerous serious substantive and procedural failings, the Respondent’s failures to follow the ACAS Code was wholly unreasonable and therefore it is just and equitable to apply the maximum 25% uplift to the compensatory award.[93]The Respondent accepts that an uplift should be applied but argues that it should be no more than 10%. Mr Mitchell took me through each element of the ACAS Code analysing it against my findings of fact in the liability judgment. He argues that the analysis shows that, albeit with some deficiencies, nonetheless the Respondent did follow each step of the Code and therefore awarding the maximum 25% uplift cannot be just and equitable when compared with a scenario where the employer did nothing at all and there was no process whatsoever. Awarding the maximum uplift of 25% against the Respondent, Mr Mitchell submits, would leave no room to distinguish with more heinous cases where the employer unreasonably fails to follow any process. Accordingly, some credit should be given to the Respondent for what it has done by way of following the ACAS Code in dismissing the Claimant.[94]In my liability judgment (see paragraph 155) I answered the question “Did the Respondent adopt a fair procedure?” as follows: I find that the respondent did not adopt a fair procedure. The outcome was predetermined, and the entire disciplinary process was a “side show”. The stark inconsistency between the treatment of the “incidents” of 10th and 17th March 2019 and the lunch of 28 July 2019 speaks for itself. Mr Dominici and Mr Henning “serving” their warnings, including for not dealing with the lunch matter as Mr Cola thought it should have been dealt with, demonstrates that they lacked independence and were under considerable pressure to achieve the result Mr Cola either expressly communicated to Mr Henning, or Mr Henning thought Mr Cola expected to see. Mr Henning admitted that no thought was given to have the matter investigated and the disciplinary process conducted by other independent individuals. In the circumstances I find that would have been necessary to achieve a fair procedure. In short, I find that after the meeting in Monaco between Mr Henning and the Colas, “the writing was on the wall” for the claimant, and there was nothing he could have said or done during the disciplinary process, which would have made the predetermined outcome any different.[95]Given my findings that the whole disciplinary process was essentially designed to create the appearance of a fair process when in fact the outcome had been decided before the process even began, I have no hesitation to find that the Respondent’s conduct was wholly unreasonable and contrary to the fundamental principle to deal with disciplinary issues fairly, which principle underpins the entire procedure set out in the ACAS Code. It would seem absurd for me to find that the Respondent should be given credit for going through the motions in order to create the appearance of it complying with the Code, when in reality it knew full well that the matter was done and dusted, and the process would not change the predetermined outcome.[96]I disagree with Mr Mitchell that dismissing an employee on the spot and without any process is a more heinous example of the procedural unfairness when compared with this case. On the contrary, I find that dragging the Claimant through a process for the sake of creating the appearance of fairness while at every step of the way denying him any opportunity to change the pre-determined outcome, thus adding to his stress and the feeling of injustice being done to him, is in fact an aggravating and not a mitigating factor for the Respondent. In short, I find that in the circumstances it is just and equitable to increase the compensatory award by the maximum 25% uplift. Grossing up[97]Following my oral judgment there have been several attempts by the parties to agree on the final compensation figure. I am grateful for both Counsels’ assistance and cooperation in making the necessary calculations. Ultimately, the parties were able to agree on all but one issue, namely on how grossing up of the compensatory award should be done.[98]Based on the evidence heard, I found that in the 2021/22 tax year the Claimant would receive £27,000 income from his home delivery business, and taking into account his compensation award, he would be a higher rate taxpayer. Accordingly, in my judgment, grossing up should be done by applying basic and higher rate tax bands. It was agreed by the parties that the sum that needed to be grossed up was £17,874.38 = £41,574.38 (total net compensatory award) – [£30,000 (tax free element) - £6,300 (basic award)].[99]On 14 April 2021, I sent the parties my grossing up calculations, with which Ms Tutin agreed. Regrettably, I have made a mistake in my calculations, for which I apologise. The mistake was not in grossing up £17,847.38, but in adding back £30,000 to the grossed up amount of £27,176.30, when the correct sum to be added back should have been £23,700 (£30,000 - £6,300(basic award)). The correct calculations are shown above in this judgment.[100]Mr Mitchell, however, argues that the Claimant’s personal allowance of £12,500 should be deducted from £17,847.38 first, and the balance of £5,374.38 grossed up applying 40% tax rate, which on his calculation (5,374.38*40%) gives the addition sum of £2,149.75 to be added to the compensatory award.[101]Mr Mitchell submits that when the award will be paid by the Respondent, the Claimant will not have earned any other income, based on his evidence that he is expecting to generate profit in his home delivery business only in July 2021. Therefore, Mr Mitchell argues, his personal allowance, still not being used, must be applied against the award, as his first income received in the tax year, and not against his future earnings.[102]The reason I disagree with Mr Mitchell’s contention that the Claimant’s personal allowance of £12,500 should be deducted from £17,847.38 is because the sum of £17,847.38 represents part of the Claimant’s net loss, and the purpose of grossing up is to give the Claimant the sum he would have had in his hand but for the Respondent’s unfair dismissal.[103]Because the Claimant is expected to earn £27,000 in the 2021/22 tax year, he will have other income extinguishing his personal allowance. Accordingly, if £12,500 were deducted from £17,847.38 he would not receive a sum corresponding to his net loss of £41,574.38.[104]The personal allowance applies in respect of all income in the tax year in question, and therefore, in my judgment, the fact that the award will be paid by the Respondent before the Claimant receives income from his business is not determinative.[105]In my judgment, it will not be just and equitable to apply all or part of the Claimant’s personal allowance towards the compensation sum that the Respondent is liable to pay the Claimant for unfairly dismissing him. It appears to me that the Respondent should not be entitled to reduce its liability to compensate the Claimant for his net loss caused by the Respondent’s unfair dismissal by using or sharing into the benefit of the Claimant’s personal allowance. For these reasons, I find that the Claimant’s personal allowance should not be deducted from the sum of £17,847.38 before grossing it up.[106]For the sake of completeness, I shall add that Mr Mitchell’s grossing up method of multiplying the net amount by the relevant grossing-up rate, in my view, is incorrect. Instead, the correct method is to divide the net amount by (1 minus grossing-up rate). Basic Award: £6,300[2]Compensatory Award: Financial loss between the effective date of termination and 30 November 2020 (net) Loss of salary, pension, 2019 Christmas bonus and healthcare benefits: £61,302.31 Less Income Received in that period: (£13,513.81)(i) Total loss between the effective date of termination and 30 November 2020£47,788.50 Financial Loss between 1 December 2020 and 30 June 2021 (net) Loss of salary, pension and healthcare: £17,273.26 Less Income Received in that period: (£10,741.82) Total loss between 01/12/2020 and 30/06/2021: £6,531.44 Applying “Polkey” reduction @ 50% (£3,265.72) Contribution towards costs of setting up new business: £1,500(ii) Total: £4,765.72(iii) Loss of statutory rights: £300 Total Financial Loss (i)+(ii)+(iii) £52,854.22 After ACAS uplift of 25% [£13,213.55] £66,067.77 Less 30% reduction under s123(6) ERA (£19,820.33) Total Net Compensatory Award £46,247.44 Grossing up net total compensatory award: balance of £30,000 allowance not used by Basic Award £23,700 amount to be grossed up: £22,547.44 Earnings Tribunal Award Band Gross Tax Net Gross Tax Net PA 12,500 0 12,500 0 0 0 BR 14.500 2,900 11,600 13,684.30 2,736.86 10,947.44 HR 0 0 0 19,333.33 7,733.33 11,600 Total 27,000 2,900 24,100 33,017.63 10,470.19 £22,547.44 Adding back tax-free amount: £23,700.00 Total Compensatory Award: £56.717.63 Total Compensation for Unfair Dismissal: £63,017.63
The Law
[1]On 30 April 2021, the Claimant applied for reconsideration of my remedies judgment dated 19 April 2021, under Rules 70-72 of the Employment Tribunals Rules of Procedure 2013.[2]The Claimant submits that the Tribunal has erred regarding(1) the order of adjustments to the compensatory award, and(2) the calculation of the Claimant’s loss of earnings as a result of its finding that his employment would have ended in any event. The Claimant submits that it is necessary in the interests of justice for the Tribunal to reconsider the judgment.[3]On 15 May 2021, the Respondent wrote to the Tribunal objecting to the Claimant’s application and putting its arguments against the two substantive grounds raised by the Claimant.[4]Having considered the parties submissions, I agree there is an error in my remedies judgment in so far as the total sum earned by the Claimant in mitigation (£24,225.36) was deducted after his total loss for both periods (from dismissal to 30/11/2020 and from 1/12/2020 to 30/06/2021) was calculated. I find that it is in the interest of justice to correct the error and recalculate the Claimant’s compensation using the correct order of mitigation deductions and “Polkey” reduction.[5]The correct approach is to split the total mitigation sum into sums earned in the first and the second periods and deduct those from the respective losses attributable to those periods. With respect to the second period, the 50% “Polkey” reduction should be applied after such deduction is made.[6]The Respondent appears to accept that “any reduction for Polkey is done after the full amount of any earnings have been deducted” (see paragraph 13 of the Respondent’s submissions). The Respondent, however, argues that there should be no reduction in the Claimant’s earning sum before the “Polkey” reduction, as otherwise this would lead to a “double reduction”.[7]I agree, there should be no additional 50% reduction of the mitigation earnings in the second period before the 50% Polkey reduction is applied to the resulting sum. The corrected calculations are set out in this judgment.[8]I accept that on the principles set out in Digital Equipment Co Ltd v Clements (No. 2) [1998] ICR 258, CA and Ministry of Defence v Wheeler [1998] ICR 242, CA that is the correct approach which I must follow. However, for the reasons set out in paragraphs 88 – 91 of my remedies judgment, I find it produces the result which, in my judgment, is not just and equitable, as it compensates the Claimant for losses in excess to those, which are attributable to the unfairness of his dismissal.[9]Also, I find it difficult to reconcile with the position when no “Polkey” reduction is applied to determine the employee’s net loss, and the employee then must give full credit for all sums earned in mitigation. The “Polkey” reduction is no more than a mechanism to establish the employee’s net loss attributable to the employer’s wrongdoing, and it is against that sum the employee must give credit for all sums earned in mitigation. The logic of discounting the sums earned in mitigation by the same per cent of “Polkey” reduction on the basis that the employee would not have had to earn those mitigation sums if he or she had not been unfairly dismissed by the employer, appears at odd with the position when no Polkey reduction is applied, as the same can be said for any mitigation earnings.[10]With respect to the Claimant’s second ground, namely that the calculation of the Claimant’s loss of earnings should include his hypothetical redundancy package comprising of what would have been his statutory redundancy pay and his contractual notice pay, I reject this.[11]My findings and conclusions on this issue are set out in my judgment at paragraphs 80 – 87.[12]The Claimant appears to argue that my conclusions are wrong in law. If that is his position, the appropriate course of action for him is to appeal my judgment on this issue to the EAT.[13]For the sake of completeness, I shall add that I do not agree with the Claimant’s analysis. The Claimant appears to seek to have his compensation covering both his ongoing losses after 30 November 2020 and loss of a chance to obtain his redundancy package in November 2020.[14]In my judgment, the Claimant cannot claim his losses for both, as one scenario necessarily precludes the other. More importantly, as stated in my remedies judgment, awarding a compensation equivalent to the Claimant’s statutory redundancy pay in respect of a hypothetical redundancy in addition to the basic award would be compensating the Claimant twice for the same loss.[15]I also do not accept that it would be just and equitable to award the Claimant a compensation for what would have been his notice pay in a hypothetical redundancy dismissal, when the Claimant eschews making a notice pay claim in these proceedings to retain his right to do so through civil courts.[16]I do not accept the Claimant’s submission that the example cited in paragraph 63 in Credit Agricole Corporate and Investment Bank v Wardle [2011] ICR 1290 gives the Claimant the right to claim statutory redundancy pay in relation to a hypothetical redundancy in addition to his basic award or be compensated for loss of his notice pay while retaining the right to make a breach of contract claim with respect to his notice entitlement in separate civil court proceedings.