Mr R Sanguiliano v JCI Capital Ltd and others: 2202339/2020

EMPLOYMENT TRIBUNALS

Case No 2202339/2020

Between

Mr R SanguilianoClaimant

JCI Capital Ltd and othersRespondent

Before

Employment Judge Elliott

Mr L Davidson (instructed by counsel) for claimant

Date 5 March 2025

JUDGMENT

ON REMEDY The Judgment of the Tribunal is that the respondents shall pay to the claimant the sum of £255,103.28.

REASONS

Introduction

[1]Judgment was given orally on 8 July 2022 on the sums awarded under periods 1, 2 and 3 including mitigation of loss, injury to feelings and aggravated damages. Due to lack of time, judgment was reserved on the issue of any uplift for unreasonable failure to comply with the ACAS Code and on the submissions as to joint and several liability and as to the final calculation of the award. The sum for pension loss was agreed and there was an agreed conversion rate from euros to pounds sterling.

[2]By a Rule 21 Judgment dated 14 December 2021 the claims for automatically unfair dismissal and for notice pay and unlawful deductions from wages succeeded, save for the claim for the cost of a flight in the sum of £102.99.

The applicable law

[3]The first and fifth respondents were present at the hearing in December 2021 but did not have leave to participate until liability had been decided and representations were made relating to this remedy hearing. The second, third and fourth respondents made no appearance.

[4]At a case management hearing on 14 December 2021 I gave leave to the first and fifth respondents to participate in this remedy hearing. The reasons for this are set out in the Case Management Order of that date.

[5]This hearing was postponed from 22/23 March 2022 on the respondents’ application because of late service of papers by the claimant. It was further postponed from 4 and 5 April 2022 to 11 April 2022 due to ill health on the part of the Judge.

[6]As two days were needed, it was not possible to complete the hearing on 11 April 2022 and we had to adjourn part heard to the first date upon which all parties were available. The remedy hearing concluded on 8 July 2022. This remote hearing

[7]The hearing was a remote public hearing, conducted using the cloud video platform (CVP) under Rule 46. The parties agreed to the hearing being conducted in this way.

Analysis

[8]In accordance with Rule 46, the tribunal ensured that members of the public could attended and observe the hearing. This was done via a notice published on Courtserve.net.

[9]The parties and public were able to hear what the tribunal heard and see the claimant as a witness as seen by the tribunal. From a technical perspective, there were no difficulties of any substance.

[10]The participants were told that was an offence to record the proceedings.

[11]The tribunal ensured that the claimant, as the only witness, had access to the relevant written materials. I was satisfied that the claimant was not being coached or assisted by any unseen third party while giving his evidence. Witness outside the jurisdiction

[12]The claimant, the only witness in this case, was in Italy joining by CVP. At the liability hearing the claimant produced confirmation from the Consulate General of Italy that they had no objection to him giving evidence remotely in proceedings in the Courts of England and Wales. The claimant gave his remedy evidence on day 1 of this hearing, prior to the publication of the Presidential Guidance on the Taking of Evidence by Video or Telephone from Persons Located Abroad dated 27 April 2022 The issues for this remedy hearing

[13]The issues for this remedy hearing were set out in the Case Management Order of 14 December 2021 and further clarified by the parties in email correspondence of 8 April 2022 follows:(i) What is the profit share to which the claimant is entitled? This was further clarified to including the correct basis for assessing the claimant’s entitlement to profit share from May to August 2019, the period to termination on 18 January 2020 and the basis for calculation of profit share post dismissal from 18 January 2020 to 21 April 2021.

(ii) What should be awarded for injury to feelings arising from the detriments?

(iii) Should there be an award for aggravated damages?

(iv) Has the claimant properly mitigated his loss?

(v) Should there be an award of 2.5% to reflect the delay in the claimant receiving payment? This was withdrawn on day 2 of the remedy hearing.

(vi) Should there be an uplift of 25% to reflect unreasonable failure to comply with the ACAS Code on Disciplinary and Grievance Procedures?

(vii) What regard, if any, should be given to tax implications?

[14]References below to “the respondents are to the first and fifth respondents, save in relation to joint and several liability where the differential is made between R1 and R5 and the other three respondents. Documents and statements

[15]There was a remedy bundle from the claimant of 618 pages. Just over 300 pages of this bundle were copies of the claimant’s job applications.

[16]There was a schedule of loss from the claimant and a counter schedule from the respondents.

[17]The tribunal heard evidence on remedy from the claimant.

[18]Where documents appeared in the bundle in Italian, even with a translation, unless it was an agreed translation, I told the parties I could not take it into account unless there was a court approved translation.

[19]The tribunal had written submissions from the parties to which counsel spoke. All submissions were fully considered together with any authorities referred to, whether or not expressly referred to below. Sums claimed in Euros

[20]The sums claimed were expressed in Euros. I told the parties that the award would be made in pounds sterling and asked them to agree an exchange rate to be applied. The parties agreed a pound/euro exchange rate of £1.20. Findings of fact on remedy

[21]The claimant’s period of service with the first respondent was from 2 September 2019 to 18 January 2020. He did not have 2 years’ service. He was employed as a portfolio manager in the UK. He had previously been employed by the first respondent in Milan between 2 May 2019 and 1 September 2019 but it was not contended that there was continuity of service. The claimant is a chartered accountant and the equivalent of a chartered financial analyst in Italy. The contractual provisions

[22]The claimant had a UK contract of employment from 2 September 2019 which was in the liability bundle page at 106. This contract was written in English.

[23]Clause 4.1, headed “Remuneration”, said that the employee “shall be paid 70% of the gross profits generated from the wealth management department and profit related to the global Equity fund, both deducted of any rebate due to introduction of clients. The remuneration shall be paid monthly and will include tax and national insurance deductions. The employee is not entitled to receive payment in respect of hours worked in excess of the employer’s normal working hours.”

[24]Clause 4.3 provided for employer pension contributions at 2% of gross salary.

[25]The claimant seeks a profit share to cover three periods: 1 May 2019 to 30 August 2019, before he joined the UK company; from 1 September 2019 to 29 November 2019 his period of employment before going on to garden leave and the period to the date of termination to 18 January 2020. He also claimed post termination losses.

[26]It was a finding of fact made at the Rule 21 hearing that the claimant was paid the gross sum of £1,423.07 per month for September, October and November 2019 (payslips as pages 278-280). He was paid £197.04 in December 2019, described as salary (page 281) and in January 2020 he was paid salary of £1,423 and holiday pay of £394.08 (page 282).

[27]The claimant’s P45 showed his pay to his leaving date of 18 January 2020 as £7,706.47.

[28]It was a finding of fact at the Rule 21 hearing that on termination, the claimant only received basic salary based on the nominal monthly salary that had originally been agreed. The profit share

[29]The claimant’s succeeded in his case that he was not paid his profit share which he says accrued monthly and was payable three monthly to align with the clients’ quarterly payments of management and performance fees.

[30]There are three periods in question for the claim for profit share. They were:a. 1 May 2019 – 30 August 2019 (pre-employment under the UK contract);

b. 1 September 2019 – 29 November 2019 (during employment and before garden leave) and 1 December 2019 – 18 January 2020 (during garden leave). These two periods were dealt with together.

c. The post-employment period. It was agreed that there was a final cut-off date of 21 April 2021 being the date upon which R1 lost its authorisation to carry out regulated activities. The claimant did not seek any stigma damages or future loss after that date. Period 1 - 1 May 2019 – 30 August 2019 pre-employment under the UK contract

[31]In respect of the first period I made a finding of fact at the hearing on 14 December 2021 that there was a binding verbal agreement made in midAugust 2019 with R2, R3 and R5 just before he made the move to London for the claimant’s profit share under clause 4.1 of his contract of employment retrospectively for the period 1 May to 30 August 2019. The claimant is entitled to his profit share. To the extent that R1 and R5 initially sought to deny liability for this, they were not in a position to do so. The finding was that under the agreement reached the claimant was to receive 50% of the profit share for this 4 month period.

Findings of fact

[32]For this first period and the second period and for the purposes of narrowing the issues the claimant was prepared to agree profit share in terms of the invoices sent to clients reflecting management fees, performance fees and execution fees.

[33]The 50% figure based on the invoices of the overall profit share for period 1 was agreed between the parties at a total of €66,051.67.

[34]The finding at liability stage was as follows – taken from my notes of delivering an oral judgment on 14 December 2021 as neither side had requested written reasons: “The claimant relied upon a verbal agreement made in mid-August 2019 with R2, R3 and R5 just before he made the move to London. The verbal agreement relied upon was that the profit share provisions in his UK contract of employment would apply retrospectively in respect of performance from May 2019 to August 2019, if he agreed to waive his entitlement to certain payments due under Italian law on the termination of his Italian employment contract. The Italian contract gave the claimant a salary of €85,000 plus a bonus of 50% of the performance and management fees on his accounts (his statement paragraph 13). The claimant also agreed not to draw a fixed salary in the UK but to received pay entirely based on profits generated. The claimant believed that he was asked to do this because he was a significant expense to the Italian business and this agreement created a better financial impression for R1 when it was trying to fundraise. I find on the claimant’s evidence that such an agreement was reached and it was a binding agreement.”

[35]The respondents said that there was a lack of particulars as to the details of the verbal agreement. What the respondents say is that 50% of the profit share for the four month period 1 May to 30 August 2019 and it related to 50% of business from new clients and the claimant on his own evidence agreed that he did not introduce any new clients. The respondents’ argument was that the claimant should receive zero. They said that the tribunal should refer back to the Italian contract which was 50% on new clients. At no point was the tribunal ever provided with an English version of the Italian contract. The parties were told that the tribunal would not take account of any document in Italian unless it was an agreed translation or there was a Court approved translation.

[36]The respondents said in submissions: “While R1 and R5 do not seek to go behind the Tribunal’s determination at liability stage, the content of the Italian contract is significant, as is the waiver signed by the claimant.”

[37]In the decision at liability stage I made no mention of a limitation on the profit share to the introduction of new clients. I was unable to reference an Italian contract when there was no translation. The respondents also relied upon the Waiver Agreement (remedy bundle, translated version, page 457) being waiver of his rights under his Italian contract of employment when he took up employment in the UK.

[38]My finding was that there was a verbal agreement and there was no reference to it being limited to new clients. The respondents’ secondary position was that the claimant’s salary of €14,541.00 should be deducted from the profit share.

[39]The claimant said that the respondents sought to go behind the liability findings, it was 50% of the profit share. The waiver did not deal with the calculation of the profit share. Finding on period 1

[40]The finding at liability stage was for a profit share. The sums due under the verbal agreement made provision for a calculation of profit share, without any limitation to the introduction of new clients or to any other deductions. It was not subject to the deduction of the claimant’s salary of €14,541.00 or anything else. The respondents, on my finding, were seeking to reopen the liability finding, to read terms into the verbal agreement, to seek limit the claimant’s entitlement to profit share to zero.

Credibility

[41]The finding was for a verbal agreement for a 50% profit share without reference to any deductions. The claimant is entitled for this period to be paid the sum of €66,051.67. Period 2 – 1 September 2019 – 29 November 2019 during employment and to 18 January 2020 during garden leave to termination

[42]The second period covers the claimant’s profit share during employment and during garden leave. The contractual entitlement is to “70% of the gross profits generated from the wealth management department and profit related to the global Equity fund” as per clause 4.1 of his contract set out above. The respondents say that this is what their invoices deal with.

[43]For expediency the claimant accepted the respondents’ calculations in the Counter Schedule of Loss in the remedy bundle at page 449. The claimant did not accept that the approach for the year 2020 was applicable to the post-employment period. The claimant also accepted that his salary of €9,091.11 should be deducted from this sum of €103,447.24. There was a period of 18 days included in that time period because his termination date was 18 January 2020. The claimant chose for expediency not to dispute those 18 days for the purposes of period 2. The claimant was content to use the data provided for 2019 because it featured the performance fees in the invoices and was pro-rated for the claimant’s period of employment so he was prepared to adopt those figures.

[44]The parties agreed that the sum payable to the claimant for period 2 was €94,356.13. Pension contributions

[45]The claimant did not receive any employer pension contributions during his employment with R1 and sought this at 3% on his losses. Since 6 April 2019 the minimum amount of the employer contribution has been 3%. Employers may decide what elements of pay are used to calculate pension contributions.

[46]The parties agreed that the sum payable to the claimant for loss of pension contribution was €4,812.23. Period 3 – post employment starting on 18 January 2020 The approach to the calculations The claimant’s approach

[47]It was agreed that there was a final cut-off date of 21 April 2021 being the date upon which R1 lost its authorisation to carry out regulated activities. The claimant did not seek any stigma damages or future loss after that date.

[48]There was a dispute as to the method of calculation as to what the claimant would have earned post-employment. The claimant said that he is a competent fund manager which can be shown from his 2019 fees which showed an upward trajectory and that same approach should be used for 2020.

[49]The strategies he would have employed were set out in an email dated 25 April 2020 to a company called MilkWood Capital, a financial services company (page 617). Furthermore the claimant said his projections were conservative and his performance would have excelled. There was no account for performance fees in the respondents’ figures, as opposed to management fees which were on a smaller percentage. The claimant “makes his money” on performance fees at 70%.

[50]The claimant submitted it was necessary to bear in mind that he was not present at R1 in 2020/2021 to manage the funds and his protected disclosures all related to the mismanagement of funds for the benefit of the respondents rather than for the benefit of the funds. The claimant said that if he had remained in employment, he would have performed much better. This would have been based on the performance to the date of termination and he submitted that there was no reason to believe that his performance would have dropped off. There was also an absence of performance fees for 2020.

[51]The total profit from 2019 was €372,451,25. If 2020 was a carbon copy of 2019, it was submitted we could take this figure as the profit generated for the year and apply the 70% profit share. The claimant said a modest increase should be applied to reflect the fact that good performance increases the actual funds under management so there would be a higher starting point. This increases the management fee and the performance fee. Adding 10% for 2020 is €37,000 takes it from €372,000 to around €400,000. Thus the claimant submitted that 70% should be applied to €400,000 to arrive at a fee of €280,000.

[52]There is a further period from January to 21 April 2021, when R1 lost its regulatory status. The claimant said that to the €400,000 figure for 2020 there should be added a 5% increase to €420,000 and divide the percentage at 25% to reflect a quarter of 1 year from January to April. This is €420,000 divided by 4 = €105,000 x 70% = €73,500.

The law

[53]The claimant sought a total of €353,500 for the period 18 January 2020 to 21 April 2021 being €280,000 + €73,500.

[54]The 70% profit share for 2020 was, on the respondent’s figures, €103,447.24 for 140 days from September 2019 to 18 January 2020. Therefore if that figure was €103,447.24 for a third of a year, €353,500 for 1.25 years was said to be entirely reasonable. The approach to the calculations The respondents’ approach

[55]The respondents said that 2020 was not a carbon copy of 2019 because of the pandemic. The tribunal had a choice between the claimant’s hypothetical approach to increases, versus the actual performance set out in the invoices for that third period of 18 January 2020 to 21 April 2021 and summarised in the Counter Schedule of Loss. The invoices (bundle pages 76-105) demonstrated the profit of R1 from January 2020 to 31 December 2020 including both global equity and wealth management, came to €132,068.86 on which the profit share of 70% was €92,448.02. The figures were also shown in the Counter Schedule of Loss at pages 450-451 of the bundle, although one of the figures required some correction.

[56]The respondents said that in any event, that even if the tribunal were to extend that into 2021, these were the appropriate figures to use. In a situation where at the beginning of 2020 the markets suffered a substantial impact, the figures bore very little resemblance to what might have been expected.

[57]The respondents said that the claimant was “not the only factor in the mix” and his figures were based only on his assertion. The respondents said that the tribunal should rely on the actual figures for 2020. The respondents rejected the notion that they were not managing the funds properly and the claimant did not take his disclosures any further in terms of reporting the matters elsewhere.

[58]The respondents said that if the claimant had the skills to create the continued upward performance for which he contended, this was inconsistent with being unable to find work up to the date of this hearing. The tribunal had nothing to show that the funds would have performed any differently than they did. The actual figures were before the tribunal. The claimant’s reply

[59]The claimant said that the difficulty was that there were no “real” figures for 2020 because the claimant was not there. The way in which compensation was structured was a reflection of the importance of the person performing the functions, given the high percentage of 70%. They pay a premium for the person in the market place making the decisions on their behalf. The claimant said that the pandemic was not the answer for the respondents and there should have been an equal return for 2020/2021. Findings on the post-employment period to 21 April 2021

Conclusions

[60]The tribunal was not provided with any evidence as to the performance of the financial markets in 2020 or early 2021. The claimant, as an expert in the field, could have told the tribunal how the markets performed and submitted that he could be expected to have received profit share in accordance with market performance or slightly above, based on his skills. What he did was to ask the tribunal to base his likely performance on the 2019 figures.

[61]There is no finding of fact that the respondents were not managing the funds correctly. Findings were made as to the disclosures made by the claimant and what those disclosures tended to show and the causation of detriments and dismissal, but this tribunal has not made findings as to incorrect management of funds.

[62]The tribunal had nothing other than the claimant’s assertion to show that the funds would have performed any differently than they did. The actual figures were before the tribunal. The claimant said that the respondents could have provided evidence as to how the markets performed; the respondents said they did not need to when the tribunal had their actual figures for the period in question.

[63]I find that the claimant’s arguments as to the performance of the funds had he remained in employment, were highly speculative, asking the tribunal to regard 2020 and early 2021 as a carbon copy of 2019. I find that it is too speculative to ask the tribunal to regard past performance as the correct barometer of future performance, in an area as uncertain as financial markets.

[64]Assessment of future loss is a more rough and ready matter and a more broad brush approach than actual loss. It is not a balance of probabilities test but an assessment of relevant chances. In the circumstances where there are actual figures and nothing but the claimant’s assertion to contradict those figures, I take the actual figures and apply a figure of 10% to the profit share to reflect the skills that the claimant would have brought to bear. This approach means taking the respondents’ profit figure, calculating the 70% and then adding 10% to that figure.

[65]The figure for period 3 was calculated and agreed between the parties at €101,693.02 as set out in a letter to the tribunal dated 7 July 2022. This was subject to the mitigation argument below. Future loss and mitigation - 18 January 2020 to 21 April 2021

[66]The first respondent ceased trading on 21 April 2021 and the parties agreed that this was the cut off point for future loss. The findings as to the loss of profit for the period 18 January 2020 to 21 April 2021 above, was subject to findings on mitigation of loss.

[67]I find on his evidence that the claimant began to look for work once his period of garden leave ended on 18 January 2020. He said that he found he had to explain to prospective employers why he was with the first respondent for only a few months and that he had brought proceedings against them so he was “often seen as a problem employee”.

[68]As he no longer had a job and an income he decided to return to Italy. He returned in February 2020. He made reference to no longer having a permanent work visa post-Brexit, but this did not come into effect until 1 January 2021.

[69]The claimant said that due to having to return to Italy, he had to “give up” a position as Fund Manager at Per4m Asset Management Ltd in Chelsea with a minimum yearly salary of £100,000 plus performance fees and bonus. He said he “lost this position” because the company did not wish to finalise a contract with him due to the pending proceedings with R1 and they wanted the proceedings to be concluded prior to him commencing employment. He said that as he was unable to take the role, he introduced a friend in his place.

[70]There was an absence of any evidence to support this. There was no correspondence from Per4m Asset Management. There was no evidence of the job offer or withdrawal of job offer or anything to indicate the reasons for this, despite the claimant saying in evidence that he “had people who could testify to this and emails”. If there were such emails, he failed to produce them on this highly significant point.

[71]The claimant said that he applied for State benefits in Italy, he said “I tried but they denied it”. He said in oral evidence that he had not disclosed any documentation related to his claim for benefits in Italy, but that he had such documentation.

[72]The claimant said he had been applying for positions “every week” and hoped to be able to secure employment “after the Remedy Hearing”. He asserted that he was “hindered by these proceedings” and was hoping to find a new position as soon as possible after the conclusion of the remedy hearing.

[73]The claimant said he had applied for approximately 100 roles, some being refused at the outset and others proceeded to interview. There were extensive emails in the bundle showing rejections of numerous job applications.

[74]I asked how many interviews the claimant had attended. He said in 2020 he attended about 5 and about one every two months in 2021, so about 5 or 6 that year. These were interviews by video call or phone call or meetings. I was not taken to any rejection letters or emails following any interviews.

[75]I heard lengthy submissions from the parties about the question of references. Mr Davidson for the claimant took the tribunal to sections 59 and 60 of the Financial Services and Markets Act 2000 as to the requirement for the regulator’s approval, being the Financial Conduct Authority (FCA) for a person who was to perform regulated functions. The tribunal was also taken to the FCA Handbook in relation to references and to Annex 1 in section 22 which provided a template for regulatory references including question G which said: “Are we aware of any other information that we reasonably consider to be relevant to your assessment of whether the individual is fit and proper?” The claimant relied on there being a pending disciplinary issue at the date of his dismissal and that this cast a cloud over his job search.

[76]I had no evidence that showed that references were ever taken up in relation to the claimant. He had not disclosed evidence showing the reasons for his rejection after any interview and he disclosed no documents from Per4m Asset Management. In the absence of any evidence that he was rejected because of any reference, I find that he was not rejected because of any reference given by any of the respondents. My finding is supported by the fact that the claimant said he had emails from Per4m Asset Management but he had not disclosed them. If they supported his case, I find that he would have included them in the bundle.

[77]The claimant accepted that there was no documentary evidence showing the reason why he did not secure any of the jobs for which he was interviewed.

[78]There is no doubt and I find that the claimant made a large number of online job searches for roles in the UK during the period from January 2020 to April 2021. There is no evidence to show why he was unsuccessful at any of the interviews he told the tribunal he attended. He said there were about 5 in 2020 and that he attended about 5 or 6 in 2021. On a balance of probabilities I find that this would amount to about 2 interviews in the period from January to April 2021. This amounts to about 7 interviews in the period in question for which no documentary evidence was produced.

[79]There were submissions on both sides as to the failure on the part of the claimant to disclose Italian tax returns. The claimant says there were no tax returns because he had no income. The respondents suggest that the claimant was in fact working in Italy during the period in question. In the absence of any information as to the requirements for filing tax returns in Italy, I am unable to find that the claimant had any obligation to file a tax return when he asserts that he had no income.

[80]The respondents said that Italian media reports showed that the claimant was working as a Head of Portfolio for an Italian brokerage firm. They also said that the claimant’s LinkedIn profile did not show that he was looking for work. The claimant said that the Italian media reports were incorrect and I paid little regard to them. As to LinkedIn, the claimant said he wanted to maintain a certain amount of privacy. As he was actively job searching on line, I find that the failure to advertise himself on LinkedIn is not fatal to his arguments that he was seeking to mitigate.

[81]There was no evidence of the claimant seeking work in Italy. This is where he was living from February 2020 and where, on his own evidence, he worked prior to joining the first respondent. The job search documentation was entirely confined to searches for work in the UK.

[82]The claimant has worked in financial markets since 1997. He is a chartered accountant and the equivalent of a chartered financial analyst in Italy. He previously worked in financial services in Italy, including working for the first respondent in Milan from May to September 2019. Particularly as he knew he would no longer have a permanent work visa post-Brexit, this made it all the more important to step up his search for work in Italy.

[83]Whilst the claimant made job applications in the UK I find that he has failed to show that he took all reasonable steps to mitigate his loss by failing to look for work in his country of residence when he is qualified and experienced in working in financial services in that country and knew that his visa situation in the UK was about to change.

[84]The respondent submits that the tribunal should limit the period of loss to February 2020 when the clamant returned to Italy. I do not accept that submission because I find that the claimant needed time to search for a suitable role in Italy. At the point of his return it was an early and serious stage in the pandemic. He also needed time to adjust to the move back from London to Italy.

[85]I find that the claimant is qualified and experienced in the financial services sector in Italy and that he failed to take all reasonable steps to mitigate his loss by seeking work in Italy. The claimant submits that as the evidence in terms of the respondent’s invoices showed that the markets were declining, this should also apply to the claimant in terms of his search for work. I agree that it may have taken some time for the claimant to secure a job, but at the same time he is clearly experienced and qualified and he showed this by securing a role at Per4m Asset Management in early 2020.

[86]As I have said above, future loss is always a more rough and ready approach and is an assessment of relevant chances. Given the matters set out above, I find that the claimant ought reasonably to have been able to mitigate his loss after a period of six months from his return to Italy. As I do not have the precise date of his return, I gave him the benefit of the doubt that it was at the end of February so that the six month period runs to the end of August 2020 so that his period of loss should extend to 1 September 2020. The award for the period 18 January 2020 to 21 April 2021

The relevant law

[87]After a break for the parties to work on the calculations the figure for the period from 18 January 2020 to 21 April 2021 after having dealt with the issue of mitigation of loss, the figure was agreed as €95,074.47. I was grateful to the parties for their cooperation in calculating this figure. Injury to feelings and aggravated damages

[88]The claimant’s evidence was that he endured “enormous sacrifice” due to the move to London which was a big life change involving the search for a house and having to return to Italy weekends to see his family. He said this was very hard for him.

[89]His evidence was that he had been “humiliated, offended, threatened and assaulted”. He was asked in cross-examination what he meant by being “assaulted”. He clarified that he meant verbally but not physically assaulted. He suggested that his life was in danger (statement paragraph 12). This was not something that he ever mentioned at the liability hearing. The respondents submitted that nothing the claimant said at liability stage merited the description he gave in his remedy witness statement.

[90]He said that his “world fell apart” having lost his job and the house he had rented and this resulted in him losing a three month “down payment” although he produced no evidence of this. He described the feeling of his work and professional life being “destroyed”.

[91]The claimant also described “many doors closed in his face due to the horrible situation created by the actions of [the first respondent].” He said that these actions caused him to suffer from depression. He also said he has difficulty sleeping and that he took medication. There was no medical evidence to support this so I was unable to make a finding as to any medical effects upon the claimant.

[92]The claimant said he had lived with “enormous mental and financial difficulties.” He said his savings had disappeared in order to survive and that his legal costs led him to sell his car which has caused him additional stress. There was no evidence to support this. The claimant said that his bank statements for the last two years would show his very difficult financial position, but these statements were not produced.

[93]The claimant said that leaving Italy was very damaging to him and if he had stayed in Italy he would have been entitled to assistance from the Italian State with guaranteed monthly salary for 12 months and a minimum wage thereafter. There was no documentary evidence to show his position as to benefits in Italy.

[94]The claimant also relied upon the respondents having offered no apology to him and having treated these Tribunal proceedings “with contempt” such that their late ET3 was rejected and application for an extension of time was refused. The claimant pointed out that R1 and R5 initially “[denied] that there has been an injury to the claimant’s feelings”.

[95]It is right that the respondents initially denied that there has been any injury to the claimant’s feelings and they denied that the claimant was entitled to any award (first set of written submissions section 3). In updated submissions they said he had “significantly exaggerated” his injury to feelings. The respondents contend for the lower Vento band. Submissions

[96]The claimant submitted that this was a question of fact for the tribunal. The claimant asked the tribunal to take into account the fact that he was in another country, he had changed his life substantially and that he was a “fish out of water”. There was also the abruptness of the supposed redundancy and trumped up disciplinary charges against someone in a regulated position. The claimant said that he was being punished for doing the right thing and in addition by taking up the employment with the first respondent he had given up his employment protections in Italy.

[97]The claimants submission was that this was comfortably a middle band case, and was inherently serious in a regulated context. It was submitted that this was a malicious overreaction and an attempt to sully the claimant’s good name when he had done nothing wrong. As such it was submitted that it was a serious and high handed approach.

[98]The claimant submitted that following Alexander v Home Office

1988 IRLR 190

(CA) and Shaw (below) that this was an appropriate case for aggravated damages. In this regulated sector, where reputation is central to the ability to secure future employment and where there was an unjustified disciplinary investigation launched by the people whom he was accusing of wrongdoing.

[99]The claimant’s submission was that this justified a middle band award and put this at £25,000 + 10,000 pounds for aggravated damages.

[100]The respondents submitted that the claimant had significantly exaggerated his injury to feelings and that his allegations were fanciful with no evidence to back them up.

[101]The respondents said there was no evidence to support the alleged level of psychological impact. Two case law examples were cited, at ET level: Conduit v Rosslyn Hill Unitarian Chapel (East London) (Case No 2208119/2016, 2200305/2018, 3200680/2019) (14 February 2020 – unreported) where 7 weeks of discrimination, followed by pressure from the employer to withdraw her claim, exacerbating the claimant’s psychological symptoms, resulted in an award of £12,500. Witt v New Quay Honey Farm Ltd and others (Cardiff) (Case No 1602264/2019) (11 February 2021 – unreported) where the claimant was insulted as an ‘old woman’ in reply to accusations of discrimination before being dismissed. In the circumstances of this being a single event the lower band was preferred, although the insult would appear to have placed the case in the middle range and the result was an award of £6,000.

[102]In the light of those examples respondent submitted that the award should be below £6,000.

[103]The respondents submitted that there should be no award for aggravated damages. The tribunal had found against the claimant on the issue of the failure to give an employment reference or a bad employment reference. The claimant’s position was inextricably linked with working in a regulatory environment and there was no evidence that he was subjected to any such detriment. The award for injury to feelings

[104]It was hard to see how such a peremptory and sudden dismissal after only about 2.5 months in the job and having gone through the upheaval of moving countries, would not result in injured feelings. The courts have held that whistle blowing awards is analogous to discrimination and there is case law support such as Virgo Fidelis and Roberts v Wilsons Solicitors (below) that awards can be made for injury to feelings in a whistleblowing claim.

[105]I agreed with the respondents submission that there was a lack of evidence to support some of the claimant's contentions. There was no medical evidence to support the alleged psychological impact upon him, or the consequential financial losses other than loss of earnings from the employment. There was nothing to support his contention that he was denied state benefits in Italy or any documentation to show the sale of his car.

[106]This was a one off act rather than a campaign over a period of time. It was nevertheless an act with serious implications as the claimant lost his job for being a whistleblower in the public interest. It was a peremptory dismissal following the upheaval of a move of country resulting in the upheaval of a move back to his country of origin. I find that the claimant’s feelings were injured but not to the extent that he asserted, because of the lack of evidence which he could have adduced had he chosen to. I find that he was not threatened or assaulted because there was no evidence of this.

[107]I find that this case justifies an award in at the middle to lower end of the middle band. The two case law examples cited by the respondents are not on point with the present case. The claimant was a whistleblower in the public interest and instantly lost his job for doing so. He had the upheaval of a move of country as a result. I make an award of £15,000 for injury to feelings.

Conclusions

[108]I decline to make an additional award for aggravated damages because the sum of £15,000 encompasses the circumstances of the dismissal and I have made no finding as to any reputational damage to the claimant. I consider it would amount to double recovery to award aggravated damages and the award of injury to feelings is proportionate to the totality of the upset caused to the claimant. Uplift for unreasonable failure to follow the ACAS Code

[109]The claimant acknowledged that this is a discretionary award and requires a finding of an unreasonable failure on the part of the respondents.

[110]The ACAS Code of Practice defines “grievances” as “concerns, problems or complaints that employees raise with their employers” (Code paragraph 1). This can apply to protected disclosures which the Tribunal found to have been made: see Ikejiaku v British Institute of Technology Ltd

EAT/0243/19

at paragraph 48 per Soole J . The claimant said that no regard was had to the claimant’s complaint as a grievance and it was not treated as a grievance.

[111]The claimant said that the respondents’ behaviour was self-evidently contrary to the spirit and the letter of the ACAS Code of Practice on disciplinary and grievance procedures, and unreasonably so. He submitted that there could be no more egregious example of noncompliance with the ACAS Code than penalising the person raising the complaint.

[112]The claimant says it was just and equitable to make such an award, taking account of the purpose of the statutory provision. ACAS Codes should be followed and Codes of Conduct should not be unreasonably departed from. It was necessary to look at overlap with the award for injury to feelings but it was submitted that there would be no double counting because it was a flagrant disregard for the Code. The claimant contended for a 25% uplift or slightly lower.

[113]The respondents made two points. There was evidence of an invitation to a disciplinary meeting and efforts to rearrange it due to the short notice and a finding of fact at liability stage that he disciplinary hearing took place by telephone on 16 January 2020. It was conducted by R3 with R2 present. This was the first time that the claimant learned the details of the first disciplinary charge.

[114]It was confirmed during submissions that the claimant did not rely on the disciplinary section of the Code but the failure to deal with this complaint as a grievance. This was the “gateway” through which he sought the uplift namely that he raised a grievance and this was not accepted by the respondents.

[115]The respondents submitted that in the event that the Tribunal decided to apply an uplift, in light of there being no upper limit on compensation, the tribunal should note the practice for example, in Michalak v Mid- Yorkshire Hospitals NHS Trust ET/1810815/08, with regard to the EAT’s decision in Wardle v Credit Agricole Corporate and Investment Bank

2011 IRLR 604

to limit an adjustment where large sums are concerned. I was not provided with a copy of the ET’s decision in Michalak but was able to consider Wardle, the Court of Appeal authority. Wardle concerned the question of an uplift for failure to comply with the since repealed statutory dismissal and disciplinary procedures which focused on what was just and equitable in terms of an uplift. This is the same consideration under section 207A. Wardle said that the tribunal should have regard to the size of the award when considering the appropriate uplift.

[116]Following Ikejiaku I find that the claimant’s whistleblowing disclosures amounted to a grievance under the ACAS Code, as a concern, problem or complaint the claimant raised with his employer. There are similarities with the present case in that Mr Ikejiaku, who was working as a senior lecturer in business and law complained that he had been told to give a pass mark to students who had been copying from others during tests. He was dismissed the following day and the tribunal found that he was dismissed for making a protected disclosure.

[117]I agree with the claimant’s submission that no regard was given to his complaint about the instruction to invest client funds in a manner he considered unlawful. The reaction to his complaint was to dismiss him. I find that this did amount to an unreasonable failure to follow the ACAS Code and that an uplift in compensation is just and equitable. In Ikejiaku the case was remitted for consideration of the amount of the uplift because the ET had considered that it did not apply in the circumstances. At paragraph 16 of Ikejiaku the EAT quoted the ET judgment which showed that the ET would have awarded an uplift of 25% had they considered they were able to do so, because of “the Respondent’s total failure to follow any procedure and flagrant disregard of basic fairness”.

[118]I find that the disregard to the principles of fairness was similar in the present case, which on a first consideration might justify an award at or just below 25%. I have gone on to consider the respondents’ submission, in the light of the Wardle case, that regard must be had to the size of the award in making any uplift. This is a substantial award as set out in the figures below under the heading Conclusions and for this reason the amount of the uplift is limited to 10%. The claim for an uplift of 2.5% for late receipt

[119]The claimant initially made a claim for an uplift of 2.5% for late receipt of compensation. This was withdrawn on day 2 of the remedy hearing on 8 July 2022. Joint and several award

[120]R1 and R5 submitted that while acknowledging the findings at liability hearing, concerning all respondents, the Tribunal should be mindful that while R2, R3 and R4 continued their non-engagement in the proceedings, R1 and R5 participated as fully as they could. It was submitted that this was a notable significant difference in approach, which was said to be “most unusual” in circumstances where a joint and severable award would be expected. It was acknowledged that there was a lack of authority on the point but it was submitted that this should not to prevent the Tribunal from dealing with remedy in a just and equitable manner between all the respondents to reflect the different levels of engagement and respect for the proceedings.

[121]R1 and R5 submitted that the tribunal should find that the difference in approach merited a far greater percentage of the award against Rs 2, 3 and 4 because this amounted to a special feature to apportion liability. R1 and R5 submitted that the tribunal was not in receipt of evidence at liability stage to determine the lesser or greater involvement. R1 and R5 accepted that this was a discretionary matter for the tribunal based on what was just and equitable.

[122]The claimant said that the question of participation in the proceedings was irrelevant as the respondents are joint tortfeasors and there was no legal basis for apportionment.

[123]I agreed with the claimant’s submission. Both parties cited Sivanandan which says at paragraph 58 “Apportionment could only take place where there was a rational basis for distinguishing between the damage caused by one tortfeasor from another, so that the tortfeasors were liable to the claimant for part only of the damage, which was attributable to each of them”. There is no finding at liability stage distinguishing between the damage caused by one respondent from another. The liability is joint and several and I saw no basis for apportionment and make no such order. Taxation

[124]The claimant’s written submission was that he currently has no income, and does not pay income tax. He is not a UK resident or UK taxpayer. It was said in submissions, but not in evidence, that he would pay tax on any award as an Italian taxpayer at a rate of approximately 35% and should not be double-taxed, by suffering a discount in the award and then having to pay tax on that discounted sum.

[125]In written submissions it was said that this should be approached in a broad brush, common-sense and reasoned way. It was acknowledged that there was an absence of any evidence on Italian tax law so there was a limit to how precise the Tribunal could be. It was submitted that it would be just and equitable for the claimant to receive the full sum and pay tax on it in Italy.

[126]The respondents’ submission was that as the claimant is not a UK tax payer, there should be no grossing up of the award (written submission paragraph 17).

[127]No oral submissions were made on this issue by either party. I make no adjustment for the claimant’s tax position in Italy in the absence of any evidence on the point. The three largest figures awarded were agreed calculations in any event.

The relevant law

[128]A compensatory award for unfair dismissal is dealt with in section 123 of the Employment Rights Act 1996 (ERA). It shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss suffered by the claimant in consequence of the dismissal, in so far as that loss is attributable to action taken by the employer. The loss referred is to include any expenses reasonably incurred by the claimant in consequence of dismissal and the loss of any benefit which he might reasonably be expected to have had but for the dismissal.

[129]It is to compensate but not to provide a bonus. It covers two main aspects, immediate loss of earnings to the date of the remedy hearing and future loss of earnings. Losses are calculated net.

[130]The EAT said in Stroud Rugby Football Club v Monkman

EAT/0143/13

that the assessment of future loss is “a rough and ready matter. It always has been and it always will be.” (judgment paragraph 25). It is not a balance of probabilities test but an assessment of relevant chances - see Chief Constable of Northumbria Police v Erichson

EAT/0027/15

at paragraph 18.

[131]Section 207A (3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) provides that if, in the case of proceedings to which the section applies, it appears to the employment tribunal that(a) the claim to which the proceedings relate concerns a matter to which a relevant ACAS Code of Practice applies,

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

(c) that failure was unreasonable it may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25%. A claim for unfair dismissal is one to which section 207A applies.

[132]A complaint of whistleblowing detriment may be presented to the tribunal under section 48(1A) Employment Rights Act 1996. Under section 49(1), where the tribunal finds the complaint well founded it may make a declaration to that effect and make an award of compensation to be paid by the employer to the complainant in respect of the act or failure to act to which the complaint relates.

[133]Under section 49(2) the amount of compensation to be awarded shall be such as the tribunal considers just and equitable in all the circumstances having regard to the infringement to which the complaint relates and any loss which is attributable to the act, or failure to act, which infringed the complainant’s rights. Under section 49(3) the loss shall be taken to include any expenses reasonably incurred in consequence of the act, or failure to act and loss of any benefit which he might reasonably have been expected to have but for the act, or failure to act.

[134]The duty to mitigate loss applies – section 49(4) ERA. The burden of proving a failure to mitigate lies with the respondents. They must show any failure was unreasonable. The tribunal must consider what steps the claimant should have taken to mitigate his loss, whether it was unreasonable for him to have failed to take any such steps and if so, the date from which alternative income would have been received.

[135]Awards for injury to feelings are compensatory. They should be just to both parties, fully compensating the claimant (without punishing the respondent) only for proven, unlawful discrimination for which the respondent is liable. Tribunals must remind themselves of the value in everyday life of the award by reference purchasing power or earnings.

[136]There are three bands for award for injury to feelings following Vento Chief Constable of West Yorkshire Police

2003 IRLR 102

CA and uprated in Da’Bell v NSPCC

2010 IRLR 19

EAT.

[137]Employment Tribunal Presidential Guidance is issued on the Vento bands and updated from time to time. In respect of claims presented on or after 6 April 2020, the Vento bands are as follows: a lower band of £900 to £9,000 (less serious cases); a middle band of £9,000 to £27,000 (cases that do not merit an award in the upper band); and an upper band of £27,000 to £45,000 (the most serious cases), with the most exceptional cases capable of exceeding £45,000. These bands take account of the 10% Simmons v Castle uplift. The ET1 in this case was presented on 17 April 2020.

[138]Aggravated damages are compensatory and not punitive. They can be awarded where the act is done in an exceptionally upsetting way – Commissioner of the Police of the Metropolis v Shaw EAT 0125/11 when the conduct is “high-handed, malicious, insulting or oppressive”. It can be awarded where the discriminatory conduct is based on prejudice or animosity or which is spiteful or vindictive. It can be awarded if the conduct at the trial is unnecessarily oppressive, failing to apologise or failing to treat the complaint with the requisite seriousness.

[139]At the same time tribunals must be aware of the risk of double recovery and consider whether the overall award of injury to feelings and aggravated damages is proportionate to the totality of the suffering caused to the claimant. Aggravated damages should usually be formulated as a subheading of injury to feelings. On the current case law the sum of £20,000 is considered to be the top of the bracket for aggravated damages.

[140]In Shaw at paragraph 29 having reviewed the current authorities Underhill P as he then was said “The large majority of awards were in the range £5,000–£7,500”. Shaw was decided in 2011. In Shaw itself, the award was reduced from £20,000 to £7,500.

[141]The claimant agreed that the tribunal does not have the power to award interest under the Employment Rights Act 1996 as it would in a discrimination claim under Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996.

[142]Where there is more than one discriminator the usual award is that each such respondent is jointly and severally liable - see London Borough of Hackney v Sivanandan CA,

2013 IRLR 408

[143]While the above cases relate to discrimination under the Equality Act 2010, the EAT has held that whistleblowing detriment remedy should be approached on the same basis: see Virgo Fidelis Senior School v Boyle

2004 IRLR 268

in which the EAT said that subjecting a whistleblower to a detriment is a form of discrimination and Roberts v Wilsons Solicitors LLP

2018 ICR 1092

(CA). The Virgo case confirms that an award for aggravated damages may also be made in a public interest disclosure claim and is not subsumed by the Vento guidelines.

Conclusions

[144]The award to the claimant is as follows. The sums found under periods 1, 2 and 3 were €66,051.67; €94,356.13 and €95,074.47 respectively. The figure for period 3 reflects the findings as to mitigation of loss. The sum for pension loss was agreed at €4,812.23. The total of these sums is €260,294.50. To this is applied the agreed conversion rate of £1.20 to produce a sterling sum of £216,912.08.

[145]Added to this is the award for injury to feelings in the sum of £15,000 making a total of £231,912.08.

[146]Added to this is the 10% uplift for failure to follow the ACAS Code, which produces a final total of £255,103.28. The five respondents are jointly and severally liable for this award.

[147]There is no award for interest and no adjustment made for tax. The figures for periods 1, 2 and 3 were agreed calculations. There is no separate award for aggravated damages.

[148]I was grateful to both counsel for their helpful submissions and to the solicitors for their input during the hearing on some of the calculations.

Introduction

[1]The liability Judgment in this case was delivered orally on 14 December 2022. It was a Rule 21 Judgment and the respondents did not have leave to participate.

[2]The remedy judgment was reserved following a remedy hearing which took place over 2 days, on 11 April and 8 July 2022.

[3]There were costs applications made on both sides. The respondents’ application was settled. This decision is to deal with the claimant’s application dated 8 August 2022. Decision on the papers

[4]By consent this application was dealt with on the papers and without a hearing. It appeared very difficult to find a mutually convenient hearing date and the claimant decided to limit the amount of the claim for costs to £20,000 to avoid the need for a detailed assessment (application paragraph 21). The issues

[5]The issue for consideration was whether to make an award of costs to the claimant against the first and fifth respondents (R1 and R5) and if so in what amount. References below to the respondents are to R1 and R5 unless it is made clear otherwise. R1, R2 and R3 did not participate in these proceedings. Documents and statements

[6]There was a costs bundle of 129 pages prepared by the claimant. It included copies of without prejudice correspondence, the parties’ submissions, case law authorities and evidence as to means from the first and fifth respondents.

[7]There were written submissions from both counsel. All submissions and any authorities referred to were fully considered, whether or not expressly referred to below. Submissions on costs

[8]The claimant says that the respondents acted unreasonably by failing to engage reasonably with settlement negotiations and adopting and maintaining an unreasonable stance on various issues relating to remedy.

[9]The claimant relies upon the overriding objective set out in Rule 2 of the Employment Tribunal Rules of Procedures 2013 which requires parties to “assist the Tribunal to further the overriding objective and in particular shall co-operate generally with each other and with the Tribunal”.

[10]The claimant relies upon case law in the civil courts to support his argument that it is well established that a failure or refusal to engage in reasonable settlement negotiations may amount to unreasonable conduct which should be sanctioned in costs. The claimant accepts that the cases cited are in the civil courts where costs are the norm rather than in the ET where costs are not the norm and there is a discretion to be exercised.

[11]The cases relied upon by the claimant were OMV Petrom SA v Glencore International AG

2017 1 WLR 3465

; Jordan v MGN Ltd

2017 EWHC 1937

Ch; Dickinson v Cassillas

2017 EWCA Civ 1254

and Pallett v MGN Ltd

2021 EWHC 76

Ch. The cases concern parties not engaging properly with settlement offers.

[12]The case law covers unreasonable conduct in specific circumstances such as indemnity costs, additional interest or departing from a usual order. The claimant submits that the principles derive from the overriding objective and submits that it is materially common to jurisdiction of the Employment Tribunal.

[13]The claimant relied on the fact that on 27 July 2021 prior to a preliminary hearing to deal with the respondents’ application for an extension of time to file the ET3, he made an offer to settle for £280,000. The amount awarded at the Remedy hearing was £255,103.28. The claimant says this was a reasonable attempt to settle at an early stage without the need for lengthy and costly hearings. The claimant says the respondent did not acknowledge the letter or a chase up.

[14]After the claimant succeeded under Rule 21 on liability and on 14 March 2022 he offered to settle for £442,477.88 plus costs of £80,000 (costs bundle page 5). The claimant says that the respondents failed to acknowledge the offer.

[15]On 1 April 2022, prior to the relisted remedy hearing, the claimant offered to settle for £350,000 plus a contribution towards costs (bundle page 3). He says this was not acknowledged. Both offers were for sums substantially more than the claimant ultimately recovered.

[16]The claimant submitted that there was no reasonable explanation for this and suggests that the respondents were “in denial” which the claimant says is supported by attempts to go behind the liability findings.

[17]There was an oral settlement offer between counsel on 4 April 2022 which was to be the date of the remedy hearing. The hearing had to be postponed because the Judge was unwell. The offer was in Euros, in the approximate sum of £125,000 which was substantially less than the sum set out in the respondents’ counter schedule of loss at €259,577.79. The claimant counter-offered at £335,000.

[18]The claimant says that the respondents further acted unreasonably in the following ways:a. Attempting to re-open liability findings by seeking to argue in relation to the pre-employment period.

b. They initially sought to argue that there should be no award at all for injury to feelings.

c. They argued unsuccessfully that the respondents should not be jointly and severally liable.

d. Their arguments on mitigation in respect of the post-termination period led to a reduction of only 6.5%.

e. They wasted time cross-examining on matters that had already been conceded, in particular the basis of calculating the profit share.

[19]The respondents (referring to R1 and R5) submit that it was unreasonable for the claimant to expect them to settle the case on behalf of all five respondents and therefore the claimant’s approach was unrealistic.

[20]The respondents also drew attention to the fact that the claimant sought far more than he was ultimately awarded and it was not a gap which could have been bridged by negotiation. They say that the claimant’s approach to his profit share was “fundamentally flawed” and this precluded any realistic prospect of settlement. The respondents (R1 and R5) say that their offer on 4 April 2022 of €150,000 was a proportionate offer in respect of themselves and the value of the claim. They were offering to settle on behalf of only two out of five respondents. They submitted that the high threshold of unreasonable conduct was not met by their inability settle the claim on behalf of others.

[21]The participating respondents also relied on their respective financial positions in support of their submission that they lack the ability to pay an award of costs.

[22]The respondents questioned whether the claimant’s costs were actually incurred and paid by him. They said that they sought confirmation which they did not receive. They said that the tribunal should be satisfied that the costs claimed were paid by the claimant such that he would be the beneficiary of any award of costs. The respondents queried whether there was a damage-based agreement by which the solicitors would benefit rather than the claimant.

[23]The respondents also submitted that their position on remedy had merit as the quantum claimed was significantly reduced. The respondents’ financial positions

[24]I saw a witness statement from a director of the R1 stating that the company was in “serious financial hardship and on the edge of bankruptcy.” As was found in the main proceedings, R1 had its FCA authorisation revoked on 21 April 2021 and had not been able to trade since then. There was a compulsory strike off warning in January 2022, which was suspended on 26 July 2022. The reason for the suspension was not given.

[25]I saw a witness statement from R5 who is a sole provider for his family. He is in employment. The evidence I saw showed that there was difficulty in covering his monthly expenditure.

[26]There was no cross-examination on the evidence as to ability to pay an award of costs, the parties having consented to the costs application being dealt with on the papers. The relevant law on costs

[27]Costs do not follow the event in employment tribunal proceedings and an award of costs is the exception and not the rule (Lord Justice Mummery in Barnsley Metropolitan Borough Council v Yerrakalva

2012 IRLR 78

[28]The power to award costs is contained in Rule 76 of the Employment Tribunal Rules of Procedure 2013 which provides that: 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;

[29]The Court of Appeal held in Yerrakalva (above) that 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 was unreasonable conduct in bringing and conducting the case and in doing so, to identify the conduct, what was unreasonable about it and what effects it had. There does not have to be a precise causal link between the unreasonable conduct in question and the specific costs being claimed.

[30]“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

[31]The rule in Calderbank v Calderbank does not apply to Employment Tribunal proceedings – Kopel v Safeway Stores plc

2003 IRLR 753

(EAT). It is nevertheless a factor which the tribunal can take into account in deciding whether to make a costs order Failure to achieve an award in excess of that offered should not by itself lead to an order for costs. The tribunal must first conclude that the conduct of the claimant in rejecting the offer was unreasonable. In the present case this requires consideration of the respondents’ approach to the claimant’s settlement proposals.

[32]Rule 76(2) provides that a Tribunal may also make an order for costs where a party has been in breach of any order or practice direction.

[33]Rule 84 says that in deciding whether to make a costs or a wasted costs order and if so, in what amount, the tribunal may have regard to the paying party’s, or in the case of wasted costs, the representative’s, ability to pay.

[34]Affordability is not the sole criterion for the exercise of the discretion – Vaughan v London Borough of Lewisham (No. 2)

2013 IRLR 713

[35]The EAT in Raggett v John Lewis plc

2012 IRLR 906

said that where a party is registered for VAT and able to recover VAT on its counsel’s fees and solicitors’ costs as input tax, to award costs including VAT would represent a bonus to that party compensating over and above the costs incurred and would represent a penalty to the paying party.

Conclusions

[36]The claimant’s position was that the respondents acted unreasonably and in breach of the duty to further the overriding objective by failing to engage reasonably with settlement negotiations and by adopting and maintaining and unreasonable stance on various issues relating to remedy.

[37]To the extent that the claimant relied on non-engagement by the respondents in terms of their failure to submit an ET3 (submissions paragraph 2), I find that this did not generate additional costs to the claimant who had the benefit of a Rule 21 Judgement without the need to incur the cost of a liability hearing.

[38]Where the claimant complains (submissions paragraph 2) that respondents “failed to engage…even on narrowing the issues” except when explicitly told to do so, eg by agreeing calculations. I find that it was not unreasonable conduct for the respondents not to agree to narrow the issues when the points were genuinely in issue for them. Agreeing calculations is a matter of mathematics. This is not the same as legal or factual points of dispute which require a determination from the tribunal. The respondents were entitled to their findings of fact on the remedy issues and it was not unreasonable conduct not to concede points which were significantly in issue.

[39]By way of example, in terms of the case law relied upon by the claimant OMV Petrom is a case in which the defendant did not respond to or accept a Part 36 offer and instead “defended the claim up hill and down dale” at a lengthy trial where witnesses were found to be “liars”. The Court of Appeal, quoting the judge below (at paragraph 2), said that the defendant in that case put the claimant “through the hoops of having to establish liability in a very flagrant case of fraud, in a manner which was wholly unreasonable”. This is not on point with the present case.

[40]In terms of the claimant’s offer made in July 2021, I find that it was not unreasonable of the respondents to fail to engage with this offer when they were in a position of seeking to contest liability and seeking permission to file an ET3 out of time. Whilst I find that the offer should have been acknowledged, I find in those circumstances it did not meet the threshold of unreasonable conduct when they were in a position of seeking leave to defend the claim. The offer made in July 2021 was withdrawn on 24 August 2021.

[41]The next offer of settlement came on 14 March 2022 after the claimant had succeeded on liability on an undefended claim. This was an offer for a very substantial sum in excess of £0.5million, including the amount of costs claimed, to be paid within 14 days of entering into a Settlement Agreement. This was reduced on 1 April 2022 to £350,000 plus a reasonable contribution towards costs.

[42]The respondents did not reply to the 14 March offer until oral discussions took place between counsel on 4 April 2022. This meant that this offer went unacknowledged for 3 weeks. Again whilst it is not good practice for the respondents to fail to acknowledge this offer, I find in circumstances of an offer of over £0.5m and with such a range of points in issue for determination, it did not meet the threshold of unreasonable conduct to fail to engage with it.

[43]The lower offer made on 1 April 2022 was sent on a Friday. Inevitably parties and solicitors need a period of time for instructions to be taken and for advice to be given. The without prejudice discussions between counsel took place on Monday 4 April 2022, the date on which the remedy hearing was originally due to commence. Whilst it would have been good practice for the respondents’ solicitors to have sent an acknowledgement of the offer on Friday 1 April, given the time frame involved I can find no unreasonable conduct on the part of the respondents in needing the weekend to consider the reduced offer.

[44]On 4 April 2022 an offer was made of €150,000 on behalf of two out of five respondents. This was not a failure to engage with negotiations.

[45]This is not a case in which the respondents failed to beat any offer made by the claimant. They succeeded on a number of points. A counterschedule of loss is not an offer.

[46]This was not a straightforward remedy hearing. It contained disputed issues of substance. There were 7 such issues in the list of issues for that hearing, including the basis of assessment of the claimant’s entitlement to profit share over different periods and whether or not he had taken proper steps to mitigate his loss. I also accept the respondents’ submission that it was difficult for them, based on the liability decision alone – in respect of which they did not participate – to be clear as to how the calculation of profit share was to be approached, certainly for period 3.

[47]The claimant relied on unreasonable conduct in attempting to re-open liability findings on the pre-employment period and the argument that the respondents should not be jointly and severably liable. I find on a balance of probabilities that these arguments did not appreciably affect the amount of costs incurred by the claimant. There was no quantification as to this.

[48]So far as the respondents initially sought to argue that there should be no award for injury to feelings, again it was not clear how this made any material difference to the costs incurred and it was a position that the respondents changed in updated written submissions.

[49]The claimant relied on a calculation that on mitigation of loss, the respondents secured a reduction “of only 6.5%”. Nevertheless, the respondents secured a reduction and the claimant did not succeed on the full period of loss claimed.

[50]The claimant said that the respondents “wasted time cross-examining on matters that had already been conceded, in particular the basis of calculating the profit share”. I did not recall this taking an appreciable amount of time and the respondents were brought back on track on this during the hearing.

[51]I agree with the claimant that the failure to acknowledge a settlement offer is not something to be condoned, especially when parties are legally represented. In terms of the July 2021 offer, the respondents were seeking to defend the proceedings and did not have a determination on this. I find that it did not meet the threshold of unreasonable conduct for them to fail to engage with that offer when they had a prospect of defending liability. This offer was withdrawn in August 2021. No further offer was made for 7 months.

[52]The respondents failed to acknowledge for 3 weeks an offer made on 14 March 2022 of over £0.5million. On my finding they should at least have acknowledged that offer but their failure to do so does not meet the threshold of unreasonable conduct. I find no unreasonable conduct with the failure to discuss an offer made on Friday 1 April until Monday 4 April.

[53]I find that the respondents did not unreasonably fail to engage with settlement negotiations. When the first offer was made they were seeking to defend liability. The offer was withdrawn a month later. For a period of 3 weeks there was a failure to acknowledge an offer made on 14 March 2022. It was revised on 1 April and responded to after the weekend on 4 April. The 14 March offer should have been acknowledged. However, due to the size of that offer I agree with the respondents that it was unlikely to result in settlement. There was engagement within a reasonable period with the 1 April offer.

[54]I also find that the respondents did not take an overall unreasonable stance on issues relating to remedy. The award was ultimately less than the amount sought by the claimant. There were points in dispute which it was reasonable for the respondents to contest. There was no quantification by the claimant of specific areas in which he says costs were unreasonably increased.

[55]I have considered whether, on the basis of the without prejudice offers made, there was a culpably lost opportunity to arrive at a settlement which the respondents should have at least tried to reach. I find that there was not.

[56]Rule 84 provides that in deciding whether to make a costs order the tribunal may have regard to the paying party ability to pay. I was able to reach this decision without taking into account the ability of R1 or R5 to pay an award of costs.

[57]Costs are not the norm in Employment Tribunal proceedings. I find that the threshold of unreasonable conduct is not met by the respondents and I decline to depart from the norm to make an award of costs to the claimant. The claimant’s application for costs is refused.

[58]The tribunal was grateful to the parties for the well prepared submissions and papers for this costs application.

[1]This decision was given orally on 14 December 2021. No request for reasons was made by the parties who participated at this hearing, namely the claimant and the first and fifth respondents. In May 2023 the third respondent, who was not present at this hearing, made an application for written reasons which was granted at a Case Management Hearing on 23 June 2023.

[2]By a claim form presented on 17 April 2020 the claimant Mr Riccardo Sanguiliano brought a claim for automatically unfair dismissal and for notice pay and unlawful deductions from wages. The claim was about the events leading to his dismissal and the amount of a profit share he was underpaid. This remote hearing

[3]The hearing was a remote public hearing, conducted using the cloud video platform (CVP) under Rule 46. The parties agreed to the hearing being conducted in this way.

[4]In accordance with Rule 46, the tribunal ensured that members of the public could attended and observe the hearing. This was done via a notice published on Courtserve.net. A member of the press attended the hearing on day 1 only.

[5]The parties and member of the press were able to hear what the tribunal heard and see the claimant as a witness as seen by the tribunal. From a technical perspective, there were no difficulties of any substance.

[6]A request was made by the members of the press to inspect the claimant’s witness statement and this was accommodated.

[7]The participants were told that was an offence to record the proceedings.

[8]The tribunal ensured that the claimant, as the only witness, had access to the relevant written materials. I was satisfied that the claimant was not being coached or assisted by any unseen third party while giving his evidence. Witness outside the jurisdiction

[9]The claimant, the only witness in this case, was in Italy joining by CVP. It was only when the claimant swore to the truth of his statement and confirmed his name and address, that the Judge noted that the witness was outside the jurisdiction.

[10]I raised the point that it was for a party calling the witness to ensure that it was lawful in the country in which the witness was based, to give evidence in our jurisdiction by that means. Neither party had considered this in advance. It is a point that has come into more focus as CVP hearings have become more common.

[11]Although the respondents did not have the right to participate in this hearing I heard briefly from Ms Hausdorff on the point. It was submitted for the respondents that enquiries needed to be made and could not be achieved today. The claimant was keen for the hearing to go ahead. Enquiries were made by the claimant of the Italian Embassy in London and it was hoped that written confirmation of the verbal response, that there was no objection, would be obtained swiftly. Unfortunately it was not. We therefore adjourned mid-afternoon on day 1 for that confirmation to be obtained.

[12]On Monday 13 December 2021 the tribunal was forwarded an email received by the claimant on that date from the Welfare Department of the Consulate General of Italy, stating that the Consulate General of Italy had no objection to the claimant giving evidence remotely in proceedings in the Courts of England and Wales. On this basis the tribunal was content to proceed, taking the claimant’s evidence by CVP from Italy.

The issues

[13]The issues were set out in a Case Management Order made by Employment Judge Walker on 28 October 2021. The respondents failed to enter an ET3/Response in time. The first and fifth respondents sought leave for an extension of time by lodging a draft Response on 12 July 2021. Judge Walker refused the application for an extension of time and this matter was not in issue for this hearing. The claim was undefended.

[14]The first and fifth respondents appeared via counsel at this hearing, who asked for permission to ask a few cross-examination questions of the claimant. Mr Davidson for the claimant objected to this. I refused leave, it being the standard position under Rule 21 that the respondent could not participate and I had been given no pressing reason as to why the tribunal should depart from this position.

[15]The issues were set out in the Order of 28 October 2021 as follows: Protected disclosure

[16]Did the claimant make a protected disclosure under section 43B Employment Rights Act 1996? Whistleblowing detriment

[17]The claimant said that on 21 November 2019 he raised concerns to the second, third and fifth respondents about an attempt to invest the funds of low risk clients into the high risk Toro Fund.

[18]Was the claimant subjected to a detriment? He relies upon three matters:a. On 22 November 2019 being given notice of redundancy and being placed on garden leave.

b. On 26 November 2019 being invited to a disciplinary meeting and on 15 January 2020 that disciplinary meeting took place.

c. The first respondent failing to pay money owed under his written contract and pursuant to a verbal agreement.

[19]Was the claimant subjected to any such detriment on the ground that he made a protected disclosure?

[20]Which, if any of the respondents are liable for each detriment (whether primarily or vicariously)? Automatically unfair dismissal

[21]Was the principal reason for the claimant’s dismissal the fact that he made a protected disclosure?

[22]Was the principal reason for the claimant’s selection for redundancy the fact that he made a protected disclosure?

[23]The claim for automatically unfair dismissal lies only against the first respondent. Unlawful deductions from wages

[24]To what sums is the claimant entitled by virtue of the Reimbursement clause of his contract?

[25]Were those sums wages for the purposes of section 13 Employment Rights Act 1996?

[26]Did the first respondent unlawfully deduct those wages?

[27]Remedy is to be determined at a later date. Documents and statements

[28]There was a bundle of documents from the claimant of 336 pages, a cast list and chronology. Some of the documents were in Italian and translations were given. I was told that these were electronic translations. They were not court approved translations. Some documents in Italian were not translated, for example a document dated 6 September 2019 by which the claimant said he waived certain rights under Italian law.

[29]The tribunal heard from the claimant. Unfortunately the page numbers given in his statement did not line up with the pages numbers in the bundle but it was possible to locate the documents referred to.

[30]The tribunal had a written submission from the claimant to which counsel spoke. It is not replicated here. All submissions, case law and legislation referred to was fully considered even if not expressly referred to below.

[31]Counsel for the respondents asked for permission to make a submission in reply to the claimant’s submission. I refused this application as the respondents did not have leave to participate in the liability hearing and the claimant objected to the application. Findings of fact

[32]This is an undefended claim. The tribunal had the evidence of the claimant and submissions from his counsel. The findings of fact made below are based on the unchallenged evidence of the claimant and the documents to which the tribunal was taken.

[33]The claimant was employed by the first respondent, a financial services company, as a portfolio manager in the UK from 2 September 2019 to 18 January 2020. He did not have two years’ service. He had previously been employed by the first respondent in Milan, Italy between 2 May 2019 and 1 September 2019 but it was not contended that there was continuity of employment for the purposes of the Employment Rights Act 1996.

[34]The first respondent (R1) is a financial services company dealing with asset management, investment banking and capital markets. The first respondent was authorised and regulated by the Financial Conduct Authority until 21 April 2021. After that date it was no longer able to provide regulated activities and products.

[35]The second respondent (R2) Mr Pinci was the Chief Executive and an employee of R1. He resigned as a Director on 30 July 2020. The third respondent (R3) Mr Clasadonte was the compliance officer. The claimant understands that he no longer works for R1. The fourth respondent (R4) Mr Bernardeschi was a portfolio manager and was a Director of R1 for a short period from 30 July 2020 to 16 September 2020. The fifth respondent (R5) Mr Torzi was an investor in the first respondent. The claimant said that he exercised significant practical control over the operations and strategy of R1. The claimant’s position is that R5 made significant decisions and was based in R1’s offices and was present at all strategic meetings. The claimant said that he was “effectively the boss”. The claimant had direct involvement with R5 and met him at least once a week.

[36]Whilst there was a question over the status of R5, the claimant was unlikely to know his contractual position with R1. Based on the findings made below including R5’s involvement in the key meeting of 21 November 2019 at which the relevant disclosure was made, I find on a balance of probabilities that even if R5 was not an employee of R1 he was either a worker or an agent of R1, such that he was involved with the day to day running of R1. The contractual provisions relied upon

[37]The claimant had a UK contract of employment from 2 September 2019 – bundle page 106. This contract was written in English.

[38]Clause 4.1, headed “Remuneration”, said that the employee “shall be paid 70% of the gross profits generated from the wealth management department and profit related to the global Equity fund, both deducted of any rebate due to introduction of clients. The remuneration shall be paid monthly and will include tax and national insurance deductions. The employee is not entitled to receive payment in respect of hours worked in excess of the employer’s normal working hours.

[39]Clause 4.3 provided for employer pension contributions at 2% of gross salary.

[40]Clause 5.1 headed “Expenses and Receipts” said: “The Employee shall be reimbursed two monthly flights from London to Italy and all reasonable hotel, travelling, entertainment and other expenses properly incurred by him in the course of his employment with the employer subject to the production of valid receipts and in accordance with the employers regulations from time to time” (page 109).

[41]The contract contained confidentiality provisions and restrictive covenants applicable for one month after the termination date.

[42]The claimant relied upon a verbal agreement made in mid-August 2019 with R2, R3 and R5 just before he made the move to London. The verbal agreement relied upon was that the profit share provisions in his UK contract of employment would apply retrospectively in respect of performance from May 2019 to August 2019, if he agreed to waive his entitlement to certain payments due under Italian law on the termination of his Italian employment contract. The Italian contract gave the claimant a salary of €85,000 plus a bonus of 50% of the performance and management fees on his accounts (his statement paragraph 13). The claimant also agreed not to draw a fixed salary in the UK but to received pay entirely based on profits generated. The claimant believed that he was asked to do this because he was a significant expense to the Italian business and this agreement created a better financial impression for R1 when it was trying to fundraise. I find on the claimant’s evidence that such an agreement was reached and it was a binding agreement.

[43]The claimant relied on a verbal agreement that his first profit share covering the period from May to September 2019 was to be paid to him in the September 2019 payroll. The claimant said that he trusted the respondents and did not seek to have this agreement incorporated into his contract. He considered that the agreement represented reasonable compensation for waiving his rights under Italian law.

[44]The tribunal was taken to a document in Italian dated 6 September 2019 which the claimant referred to as a resolution contract in which he agreed to waive his rights under Italian law. Although this document was in the bundle at page 118 it was in Italian with no official translation and I make no finding as to precisely what it says. On the claimant’s own evidence, I find that this document did not make any reference to the verbal agreement for retrospective profit share from May to September 2019.

[45]This is an undefended claim and I find that there was an agreement for retrospective profit share from May to September 2019.

[46]On about 15 September 2019 the claimant was approached by a nonstatutory director of R1 who dealt with HR matters. She told him that his contract did not comply with the requirement for a national minimum wage so that it was necessary to pay him a nominal salary so this could be shown on his payslip. The claimant was told that it would be treated as an advance payment of his profit share entitlement. This was not put in writing by either party. The claimant did not accept that the sum that was to be shown on his payslip, would represent his full contractual entitlement.

[47]The claimant was paid the gross sum of £1,423.07 for September, October and November 2019 (payslips as pages 278-280). He was paid £197.04 in December 2019, described as salary (page 281) and in January 2020 he was paid salary of £1,423 and holiday pay of £394.08 (page 282).

[48]The claimant’s P45 at page 283 showed his pay to his leaving date of 18 January 2020 as £7,706.47. The background to the disclosures

[49]The wealth management department at R1 managed six accounts. They charge both performance and management fees for managing their clients’ investments. A management fee is typically calculated as a percentage of assets under management (AUM) and is payable regardless of performance. The performance fee is typically calculated as a percentage of the increase to the AUM and is usually calculated and paid at the beginning of each quarter, 1 January, 1 April, 1 July and 1 October.

[50]The management fee on the six accounts was at varying rates, never higher than 1%. They were payable by the clients quarterly in advance. A performance fee was payable on three of the accounts managed by the R1, payable by the client at the end of the quarter. For two accounts the performance fee was 10% of the profits generated in the quarter and for the third account it was 20%.

[51]During the claimant’s employment with R1, the largest client was the Statura Group which was a trust managing funds for private clients. The client contact was Mr DP. The client had a low risk profile towards its investments. Prior to the claimant joining R1, the funds for this client were underperforming. Their funds were held in two of the accounts managed by R1 on which the 10% performance fee applied.

[52]The claimant worked together with Mr DP to improve the performance of this client’s assets and maintained the low risk profile. DP gave instructions to the claimant that he did not want any of the funds related to R1 included in the portfolio considering their heavy losses in the past. By the end of May 2019 their assets has improved significantly.

[53]The Toro Fund was R1’s fund, managed by R4. During the claimant’s employment it had been loss making. The claimant understood it to be a legal requirement that funds must have a minimum AUM of €100m before placing an order for investment in derivatives. He believed that as the Toro fund was managed by R1, it would in effect receive double commission by investing money from the Global Equity fund into the Toro Fund. The disclosures relied upon

[54]At about 3pm on Thursday 21 November 2019 the claimant was called to a meeting with R2, R3 and R5. They told him that he was expected to purchase assets in the Toro Fund for all of his clients’ accounts. He said that this action was illegal for many reasons, specifically the clients’ mandate, the trustee instructions, risk management valuations and FCA rules about the size of funds.

[55]I find that the disclosure he made at the meeting on 21 November 2019 is set out in paragraph 36 of his witness statement quoted below: “I stated that this requested action was illegal for many reasons, specifically the client’s mandate, the trustee instructions, risk management valuations and the FCA rules about the size of the Funds.”

[56]The claimant’s evidence was that he was aware that R1 was regulated by the FCA and required to comply with its Handbook and he believed the other respondents to be obliged to comply with this because of their senior positions within a regulated firm.

[57]The claimant believed that the instruction was not compliant with the principles in the FCA Handbook. He set out in his witness statement the detail of his concerns. In his view the instruction breached the express requirements of at least one of their clients, Statura; that the Toro fund was loss making and did not represent a suitable investment, it was contrary to Statura’s low risk profile, it would create a conflict of interest as the client would be charged twice for the investment and that the instruction was from the respondents’ self-interest rather than in the interests of the client as it would increase the commission.

[58]I asked the claimant how many clients he had and how many clients R1 had. The claimant said he managed all the clients and there were about six clients which were all family trusts. He did not know the exact number of people in each of the trusts but he estimated about 15 people per trust, making a total number of individuals affected by the investments of about 90.

[59]In terms of the public interest claimant said he believed it was in the interests of his clients and “the public more generally that potential breaches be addressed”. He believed that his clients in particular faced significant risk to their investments and this was not in their interests. The claimant considered it important that a FCA regulated company acted properly, and that R1 did not place other clients’ investments at risk. I find for three reasons that the claimant reasonably believed that his disclosure was in the public interest: firstly the numbers affected, around 90 people; secondly because he was experienced in the investment field and understood the importance of the FCA Rules and thirdly because he knew that the investments proposed were contrary to his clients’ instructions and were based upon the respondents’ interests rather than the interests of those clients.

[60]The claimant told those at the meeting that he would not comply with the instruction because it would put him in breach of the FCA Handbook in particular with regard to acting with integrity and acting in clients’ interests. His evidence was that R2, R3 and R5 were upset about his response and that they became verbally aggressive. He could not recall exactly what was said. The claimant said R5 warned him that if he did not do as instructed his profit share bonus would be at risk. R5 told the claimant at the meeting that he believed the bonus to be around £150,000.

[61]Within an hour of the meeting the claimant’s login credentials with Bloomberg were cut off so that he could not control his clients’ accounts. R2 told him that this had been done to save cost.

[62]The claimant gave an account about investment instructions given by R2 to one of the his direct reports; these instructions were given in Italian and were for investments into the Toro Fund and concerned the claimant’s clients. The instructions were for €52 million, less than the €100million minimum required, as set out above (page 173). R4, who managed the Toro Fund, was copied in to some of the email correspondence at about 4:11pm on 21 November (see page 169). Given that he was copied on the email correspondence on that date, I find on a balance of probabilities that R4 was involved with the other respondents, in the decision making which had the potential to affect R4 as the fund manager.

[63]Shortly before 5pm on 21 November 2019, Credit Suisse replied to the claimant’s direct report, copying the claimant saying that the investment guidelines did not permit the investment. At about 5pm the claimant took the opportunity to have another conversation with R2, R3 and R5, saying he was aware of their instructions to his junior colleague and said it was clear breach of FCA Rules, repeating what he had said at the meeting earlier that day.

[64]Ultimately the instructions did not proceed because R1’s bankers prevented the investment from going ahead due to the high-risk nature of the investment and recognising that it would be in breach of FCA rules. The claimant’s redundancy dismissal

[65]On Friday 22 November 2019, the day after making his disclosure, the claimant was asked to attend a meeting with R3. He was told that he was being made redundant. He was given a letter, which was dated 21 November 2019 (bundle page 186), giving notice of termination of employment. He was told that there was no suitable alternative employment, his employment would end on 18 January 2020 but that he would be placed on garden leave during his two month notice period. The letter said there had been a consultation period. The claimant’s evidence and my finding based on that evidence, is that no such consultation took place. The claimant had no prior warning of any redundancy situation.

[66]I find based on the date of the letter, that it was prepared by R3, the author of the letter, on 21 November 2019, the day of the disclosure. It was handed to the claimant the following day. The letter was signed by R3 as a Director “For and on behalf of [R1]”.

[67]R1 had a contractual right to place the claimant on garden leave under clause 10.2 of his contract of employment.

[68]The claimant’s position was that the termination of his employment on 22 November was due to the disclosures he made on 21 November.

[69]I have considered what was the reason for the claimant’s dismissal. I find it was for the disclosures he made on 21 November 2019, for the following reasons. Firstly, the timing of the claimant’s dismissal leads me to find on a balance of probabilities the disclosures formed the reason for his dismissal. The dismissal letter was given to the claimant the day after he made his disclosures and the letter was dated the same day as the disclosures. Secondly, he had no prior notice of any redundancy situation and I find that this was not the reason. Thirdly the claimant’s evidence was that R2, R3 and R5 did not react well to his disclosures and this led to the immediate disconnection of his Bloomberg credentials within the hour to prevent him from trading. I find that the immediate disconnection of the claimant’s access to Bloomberg and the preparation of a dismissal letter on the same day were in direct response to his disclosures which was the reason for his dismissal. Disciplinary proceedings

[70]On about 23 November 2019 the claimant flew to Italy. On 26 November 2019 he received an email by letter from R3 (page 191) requiring him to attend a disciplinary meeting on Thursday, 28 November 2019. The following two disciplinary charges were put to him: a) Breach of clauses 12 and 14 of his contract in relation to restrictive covenants and disclosure obligations. b) Breach of the respondent’s communication policy [and other provisions] as he had contacted the client using non-compliant and prescribed devices.

[71]The claimant was told that one of the possible consequences of the meeting could be the immediate termination of his contract of employment. He was told of his statutory right to be accompanied. The claimant was not given any more information or detail about these disciplinary charges. He was not told how he was said to have breached his covenants or disclosure obligations or how he had breached the respondent’s noncommunication policy. The disciplinary meeting did not take place on 28 November because the claimant was in Italy.

[72]On 11 December 2019 the claimant received a phone call from R3 seeking to rearrange the disciplinary hearing. The claimant asked for more information on the disciplinary charges but he was not given any further information. In an email sent at about 6pm on 11 December the claimant told the respondents that they were breaking the law and said that they had not paid his full salary, performance fees and expenses as required by the contract and they had not given him evidence of the “false accusations” (page 218). He said that further communication would be through his lawyers.

[73]R3’s position (email 12 December 2019 page 216) was that the claimant had been given all the necessary information in the letter of 28 November.

[74]The disciplinary hearing took place by telephone on 16 January 2020. It was held by R3 with R2 present. This was the first time that the claimant learned the details of the first disciplinary charge which was that he had been in touch with the client in breach of his contractual restrictions. The claimant believes that the allegations related to him taking a call from his client contact Mr DP on about 23 November 2019 to say that he was shocked and worried to hear that the claimant had been made redundant. It is not necessary for me to make any finding in relation to the disciplinary charges as this is not in issue in these proceedings.

[75]The claimant was not told the outcome of the disciplinary proceedings and his employment terminated on 18 January 2020 in accordance with the termination letter given to him on 22 November 2019. On termination, the claimant only received his basic salary.

[76]The finding as to the reason for the disciplinary proceedings goes hand in hand with the reason for dismissal. I find that it was the negative reaction of the respondents to the disclosures made by the claimant on 21 November 2019 and their wish to be sure that they had secured the removal of the claimant from the employment of R1. The claim for unlawful deductions from wages and the third detriment

[77]The claimant received £7,706.474 for the entirety of his period of employment with R1 from 2 September 2019 to 18 January 2020. This was based on the nominal monthly salary that had originally been agreed.

[78]The claimant’s case is that he was not paid his profit share which he says accrued monthly that was payable three monthly to align with the clients’ quarterly payments of management and performance fees.

[79]As set out above, in the meeting on 21 November 2019 R5 told the claimant that he was putting at risk a bonus in the region of £150,000.

[80]The quantum of any profit share is a matter for the remedy hearing. It has not been paid.

[81]The claimant also claims for the cost of a return flight to Italy on 8-11 November 2019 in the sum of £102.99 under clause 5.1 of his contract. I find on the claimant’s evidence that his has not been paid to him.

[82]The claimant was not paid his profit share under the terms of his contract of employment or under the verbal agreement of August 2019 retrospectively to May 2019. I find that the reason he was not paid for this or his flight expense was because of the respondents’ very negative response to his disclosures which went against their wishes and instructions. The FCA Principles

[83]The FCA Handbook requires regulated firms to adhere to their 11 Principles of Business referred to as “PRIN”. If a firm breaches those principles the FCA can take enforcement action including removing the firm’s authorisation to operate.

[84]The FCA Rules are made under powers conferred in the Financial Services and Markets Act 2000, in particular as amended at section 137A by the Financial Services Act 2012, its general rule-making power and other legislation. Section 137A(1) says that the FCA may make such rules applying to authorised person(a) with respect to the carrying on by them of regulated activities, or

(b) with respect to the carrying on by them of activities which are not regulated activities as appear to the FCA to be necessary or expedient for the purpose of advancing one or more of its operational objectives.

[85]These form part of the relevant requirements for which the regulators may impose fines, seek injunctions or restitution orders them, compel the production of information and evidence, remove authorisation or prohibit a regulated firm from carrying out functions in the financial industry.

[86]Examples of the principles include principle 1 that a firm must conduct its business with integrity and principle 2 that a firm must conduct its business with due skill, care and diligence. The relevant law

[87]Under Rule 21(2) of the Employment Tribunal Rules of Procedure 2013, where no Response has been presented on the expiry of the time limit, an Employment Judge shall decide whether on the available material a determination can properly be made of the claim, otherwise a hearing shall be fixed before a Judge alone. Under Rule 21(3) the respondent is entitled to notice of the hearing and any decisions of the tribunal but is only entitled to participate in any hearing to the extent permitted by the Judge.

[88]Under section 48A of the Employment Rights Act 1996, a “protected disclosure” is defined as a “qualifying disclosure” which is disclosed in accordance with sections 43C to 43H of that Act.

[89]Section 43B(1) of the Employment Rights Act 1996 defines a qualifying disclosure as follows and as relevant to this case. (1) In this Part a “qualifying disclosure” means any disclosure of information which, in the reasonable belief of the worker making the disclosure, is made in the public interest and tends to show one or more of the following— (b) the information disclosed tends to show that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject.

[90]Under section 43C qualifying disclosure is made if the worker makes the disclosure to his employer.

[91]Disclosure of information should be given its ordinary meaning, which revolves around conveying facts. It is possible an allegation may contain information, whether expressly or impliedly. In Kilraine v London Borough of Wandsworth

2018 ICR 185

the CA said that in order for a statement or disclosure to be a qualifying disclosure, it had to have sufficient factual content and specificity such as is capable of tending to show one of the matters listed in subsection (1) - (of section 43B). There is no rigid distinction between allegations and disclosures of information.

[92]In terms of the reasonableness of the belief, the Court of Appeal in Babula v Waltham Forest College

2007 ICR 1026

said that whilst an employee claiming the protection of section 43B(1) must have a reasonable belief that the information he/she is disclosing, tends to show one or more of the matters in that section, there is no requirement to demonstrate that the belief is factually correct. The belief may be reasonable even if it turns out to be wrong. Whether the belief was reasonably held is a matter for the tribunal to determine.

[93]The leading authority on the public interest test is Chesterton Global Ltd v Nurmohamed

2018 ICR 731

. The worker’s belief that the disclosure was made in the public interest must be objectively reasonable. The words “in the public interest” were introduced in 2013 to prevent a worker from relying on a breach of his or her own contract of employment where the breach is of a personal nature and there are no wider public interest implications.

[94]In Chesterton whilst the employee was found to be most concerned about himself (in relation to bonus payments) the tribunal was satisfied that he did have other office managers in mind and concluded that a section of the public was affected. Potentially about 100 senior managers were affected by the matters disclosed. The claimant believed that his employer was exaggerating expenses to depress profits and thus reducing commission payments in total by about £2-3million.

[95]The Court of Appeal (CA) held that the mere fact something is in the worker's private interests does not prevent it also being in the public interest. It will be heavily fact-dependent. Underhill LJ noted four relevant factors:• The numbers in the group whose interests the disclosure served

• The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed

• The nature of the wrongdoing disclosed – disclosure of deliberate wrongdoing is more likely to be in the public interest than the disclosure of inadvertent wrongdoing affecting the same number of people

• The identity of the alleged wrongdoer – the larger or more prominent the wrongdoer (in terms of the size of its relevant community, i.e. staff, suppliers and clients), the more obviously should a disclosure about its activities engage the public interest although this should not be taken too far.

[96]The Court of Appeal also sounded a note of caution (paragraph 36) that the public interest test did not lend itself to absolute rules. The broad intent behind the amendment to the law in July 2013 introducing the public interest test, is that workers making disclosures in the context of private workplace disputes should not attract the enhanced statutory protection accorded to whistleblowers, even where more than one worker is involved.

[97]The term “public interest” is not defined in the legislation. There is a two stage test according to the Court of Appeal in Ibrahim v HCA International

2020 IRLR 224

(i) did the clamant have a genuine belief at the time that the disclosure was in the public interest and

(ii) if so, did he have reasonable grounds for so believing? The claimant's motivation for making the disclosure is not part of this test. The tribunal must look at the claimant’s subjective belief at the time he made the disclosure (Judgment paragraph 25 Underhill LJ).

[98]It is for the tribunal to rule as a question of fact on whether there was a sufficient public interest to qualify under the legislation. The term “public interest” is not defined in the legislation. In Parsons v Airplus International Ltd

EAT/0111/17

the EAT pointed out that in law a disclosure does not have to be either wholly in the public interest or wholly from self-interest. It could be both and this does not prevent a tribunal from finding on the facts that it was actually only one of those. In that case the claimant made a series of disclosures that in principle could have been protected but were found to be made as part of a disciplinary dispute with the employer which led to her dismissal for other reasons. The EAT found that the tribunal was entitled to find that the disclosures were made in her self-interest and not in the public interest.

[99]Section 103A provides that an employee who is dismissed shall be regarded …. as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure. On the unfair dismissal claim the burden is on the claimant to prove the reason for dismissal as he did not have two years’ service.

[100]Section 105(1) provides that an employee shall be regarded as unfairly dismissed if the reason, or principal reason for dismissal was redundancy and it is shown that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by the employee and who have not been dismissed by the employer. Under section 105(6A) this applies if the reason for selection for redundancy was that specified in section 103A (above).

[101]Section 47B(1) provides that a worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure.

[102]Under section 47B(1A) A worker has the right not to be subjected to a detriment by another worker in the course of that worker’s employment or by an agent of the employer with the employer’s authority on the ground that the worked made a protected disclosure. Section 47B(1B) provides for vicarious liability on the part of the employer and under section 47B(1C) it is immaterial whether the detriment is done with the knowledge or approval of the employer, subject to a reasonable steps defence in section 47B(1D).

[103]To the extent that any detriment amounts to dismissal, it was held by the Court of Appeal in Timis v Osipov

2019 IRLR 52

that section 47B(2) ERA can include a detriment claim against a co-worker in respect of a dismissal.

[104]Under section 48(2) ERA the burden is on the respondent on a detriment claim to show the ground on which any act was done. The test is whether the protected disclosure materially influenced the relevant decision, in the sense of being more than a trivial influence: see Fecitt v NHS Manchester

2012 ICR 372

(CA) at paragraph 45. Unlawful deductions from wages

[105]Section 13(1) of the ERA 1996 provides an employer shall not make a deduction from wages of a worker employed by him unless the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or the worker has previously signified in writing his agreement or consent to the making of the deduction.

[106]Section 13(3) provides that where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him….., the amount of the deficiency shall be treated … as a deduction made by the employer from the worker's wages.

[107]Section 27 sets out the meaning of wages. Section 27(1) excludes any payments under subsection (2). Subsection (2)(b) covers any payment in respect of expenses incurred by the worker in carrying out his employment.

Conclusions

[108]The first step was to consider whether the claimant made a protected disclosure.

[109]It was submitted for the claimant that the disclosure, set out in paragraph 36 of his witness statement, included the information required by statute and cited Eiger Securities LLP v Korshunova

2017 IRLR 115

(EAT) at paragraph 35: 35. The claimant stated to Mr Ashton that it was wrong for him to trade from her personally designated computer without making it clear that she is not the person making the trade and identifying himself. If the statement had stopped there it may have been no more than an allegation of wrongdoing. However the claimant went on to tell Mr Ashton what her clients thought of his behaviour. This was new information given to Mr Ashton. The two sentences should be read together and considered in their context. This is an example of the situation envisaged by Langstaff J in Kilraine in which allegation and information are intertwined. Whether such words are to be regarded as “disclosure of information” within the meaning of section 43B(1) depends on the context and the circumstances in which they are spoken. The decision as to whether such words which include some allegations cross the statutory threshold of disclosure of information is essentially a question of fact for the employment tribunal which has heard evidence.

[110]The claimant in the present case said that he considered the investment instruction “illegal for many reasons”, he set out those reasons and specifically mentioned the FCA rules. He made this disclosure to R2, R3 and R5 twice on 21 November 2019 so it was a disclosure made to his employer as well as to those personally named respondents. I find that it tended to show that compliance with the instruction to purchase assets in the Toro Fund for all of his clients’ accounts, would amount to a failure comply with their legal obligations under the FCA principles.

[111]I have considered whether the claimant reasonably believed his disclosure was in the public interest. His evidence was that investment into the Toro fund, contrary to the instructions of his clients, affected around 90 people. In the Chesterton case (above) the number of individuals affected was about a 100 and the Court of Appeal held that the public interest test was satisfied. In Chesterton the claimant believed that the company was deliberately mis-stating £2-3 million of costs and liabilities. This was enough to satisfy the public interest test. In the present case the sums involved were around €52million, substantially more than in Chesterton.

[112]In this case the interests of those affected had the potential to be substantial in that they risked losses to their considerable investments. The investment in the Toro Fund was contrary to their instructions and their risk profile.

[113]I find that that the claimant had a reasonable belief that his disclosure was in the public interest at the time his disclosure was made and that for the reasons given above he had reasonable grounds for believing this.

[114]I accepted the claimant’s submission that the claimant had nothing to gain personally from making this disclosure. I find that it was not made in selfinterest.

[115]I find that the claimant made protected disclosures. The dismissal

[116]I have found above that the reason for dismissal was the protected disclosures made by the claimant on 21 November 2019. The unfair dismissal claim lies only against R1 and the claim for unfair dismissal succeeds. The detriments

[117]I have found above that all detriments took place. The first two were that on 22 November 2019 the claimant was given notice of redundancy and placed on garden leave and that on 26 November 2019 he was invited to a disciplinary meeting with the disciplinary meeting taking place on 16 January 2020. The third detriment relates to two categories of unpaid amounts.

[118]I have made findings above that the detriments were on the ground that the claimant had made protected disclosures. The causation test is satisfied.

[119]In terms of who is liable for the detriments, I find that on all three detriments that this is R2, R3, R4 and R5 for whom R1 is vicariously liable. There was no reasonable steps defence in this undefended claim.

[120]The disclosures were made to R2, R3 and R5. I saw that R4 had been copied in on the relevant email correspondence on 21 November 2019 as the fund manager of the Toro Fund, (see page 169 at 4.11pm) and this was sufficient for me to find, on a balance of probabilities that he was involved with the other respondents, in the decision making which had the potential to affect him as the fund manager. Unlawful deductions

[121]I have found above that there was a verbal agreement for the claimant’s profit share under clause 4.1 of his contract retrospectively for the period May to September 2019. The amount of this entitlement is a matter for quantum at the remedy hearing.

[122]In relation to the cost of the return flight from London to Italy I find that this is not recoverable under section 13 as it does not fall within the definition of wages under section 27(1) ERA. It is excluded under section 27(2)(b) being a payment in respect of expenses incurred by the worker in carrying out his employment. This follows the wording in clause 5.1 of the claimant’s contract of employment, under the heading “Expenses and Receipts” which entitled him to reimbursement of two monthly flights from London to Italy incurred by him. The clause refers to it being in the course of his employment. The claimant submitted that I should separate the words: “The Employee shall be reimbursed two monthly flights from London to Italy” from “and all reasonable hotel, travelling, entertainment and other expenses properly incurred by him in the course of his employment”. It was submitted that the two flights were “a perk”. If it was intended as a perk, my finding is that the entitlement belonged under the clause relating to remuneration and not expenses. I did not have enough evidence to make a finding as to the purpose of the flights and I find on a balance of probabilities, given that the wording is in the clause, that it was required in the course of his employment.

[123]I am supported in my decision that it is not wages because it is not included under the heading of Remuneration and is covered by a different clause on expenses. It is a contractual entitlement and the claimant made clear in his professionally drafted Grounds of Complaint paragraph 43 that he does not bring a breach of contract claim. The claim for unlawful deductions fails for reimbursement of the cost of the flight.

[1]JCI Capital Ltd (‘JCI Capital’), the First Respondent, was at all relevant times a company trading in the field of financial services, authorised by the Financial Conduct Authority (‘FCA’) in the UK and CONSOB (Commissione Nazionale per la Società e la Borsa) in Italy to provide investment services. Among other activities it managed three, and after November 2019 four, investment funds and served five wealth management clients. In April 2021 it lost its authority to carry out regulated activities and, in June 2023, it was compulsorily struck off the register of companies.

[2]Mr Daniele Pinci, the Second Respondent, was at all relevant times a statutory director of JCI Capital and its CEO. In July 2020 he ceased to be a director and relinquished all operational involvement in the company.

[3]Mr Domenico Clasadonte, the Third Respondent, was employed by JCI Capital between August 2018 and March 2020 as Director - Compliance Oversight and Money Laundering Reporting Officer. He was not a statutory director.

[4]Mr Marco Bernardeschi, the Fourth Respondent, was from mid-2018 the fund manager of an investment fund known as the Toro Fund, operating through his own company. From late 2018 he was involved in discussions with leading figures in JCI Capital with a view to the latter becoming the investment manager of the Toro Fund and him joining the organisation, not merely as the manager of that fund but as the company’s Head of Asset Management. By early November 2019 these plans had advanced considerably. JCI Capital had become the investment manager of the Toro Fund and Mr Bernardeschi was playing an active part in planning the company’s future - so much so that one issue debated before us was whether, despite the fact that no contract of employment had been executed, he had by the time of the material events become an employee of JCI Capital or alternatively was acting as its agent.

[5]Mr Gianluigi Torzi, the Fifth Respondent, joined JCI Capital in January 2019 and swiftly built up a controlling shareholding in the company. His involvement with it seems to have ended in 2020 or 2021.

[6]The Claimant, Mr Riccardo Sangiuliano, was continuously employed by JCI Capital from 2 May 2019 until 18 January 2020, initially in Milan, working under an Italian contract, and, from 2 September 2019, in London under a UK contract. His job title in London was Portfolio Manager. The employment ended with dismissal on notice on the stated ground of redundancy.

[7]For convenience we will refer to the Claimant and the Second to Fifth Respondents individually by name.

[8]By a claim form presented on 17 April 2020 Mr Sangiuliano brought complaints against the five Respondents under the ‘whistle-blowing’ provisions, alleging automatically unfair dismissal and detrimental treatment, together with certain money claims.

[9]In circumstances which we will explain, the matter ultimately came before us on 3 February 2025 in the form of a final hearing held face-to-face with 10 sitting days allocated, to determine the Claimant’s complaints of detrimental treatment on ‘whistle-blowing’ grounds against Mr Pinci, Mr Clasadonte and Mr Bernardeschi only (the claims against JCI Capital and Mr Torzi having already been determined by judgments in default of response and not set aside). The Claimant was represented by Mr Nigel Brockley, counsel, and the three Respondents just mentioned1, by Mr Niran de Silva KC. We are grateful to both for their assistance.

[10]On day one, before we adjourned to read the statements and key documents, three preliminary issues were raised. The first was Mr Brockley’s application for the reasons given for deposit orders made against Mr Sangiuliano on 21 November 2023 to be ‘sealed’ and not read by the Tribunal before its decision on the claims was delivered. We refused the application for reasons given orally. In summary, we pointed out that there was nothing in the Tribunal’s procedural rules directing the suppression of reasons for deposit orders and there was no practice to that effect in the London Central region. Moreover, EJ Keogh’s reasons for her decision on the deposit order applications formed part of her judgment on the parallel strike-out application and constituted an essential element of the case management background which the Tribunal needed to understand in order to do justice to the case. But we did assure Mr Brockley that we would arrive at our own conclusions on the evidence and would attach limited weight to EJ Keogh’s analysis given that it was necessarily based not on evidence but on a preliminary assessment on the documents alone. The second matter was Mr de Silva’s application to add certain documents to the bundle. To this Mr Brockley sensibly pressed no objection and we granted the application accordingly. Thirdly, Mr de Silva asked for permission to adduce the expert evidence of Mr Naghdi, a computer forensics specialist. Again, there was no objection from Mr Brockley and, for brief reasons given, we granted permission. 1 All references hereafter to the Respondents are, save where otherwise stated, to the three Respondents represented by Mr de Silva KC.

[11]Having heard evidence and submissions on liability, we took time for private deliberations and, on the morning of day 10 of the allocation, delivered an oral decision dismissing the complaints on the ground that there had been no protected disclosure and the claims accordingly fell at the first hurdle. We then heard a costs application on behalf of the Respondents which we granted in the terms of our judgment above, para (2).

[12]These reasons are given in written form pursuant to an oral request made on behalf of the Claimant at the hearing. The Procedural History

[13]The dispute has a long and unusual case management history, from which what follows extracts only what is needed to explain our decision.(1) Consistent with the letter before claim, the claim form alleged that Mr Sangiuliano had made a protected disclosure (‘PD’) to Mr Pinci, Mr Clasadonte and Mr Torzi at about 3 p.m. on 21 November 2019 to the effect that he had learned that Mr Pinci had that day sent an instruction to Mr Federico Ponzio, a junior analyst, to invest in the Toro Fund on behalf of Mr Sangiuliano’s clients; that the fund was a ‘high risk’ product and not compatible with the clients’ investment profiles and that accordingly the instruction had been against the law, JCI Capital’s regulatory obligations and its obligations to its clients.

(2) No response form was presented within the prescribed period.

(3) On 28 October 2021 EJ Walker refused an application on behalf of JCI Capital and Mr Torzi for permission to serve response forms out of time. She also listed an (uncontested) liability hearing for 9 December 2021.

(4) On 16 November 2021 Mr Ponzio sent to Mr Sangiuliano a copy of the email of 21 November 2019 from Mr Pinci to him, timed at 16:11, on which Mr Sangiuliano had relied as containing the instruction which formed the basis for his alleged PD (‘the 16:11 email’).

(5) On 24 November 2021 Mr Sangiuliano produced a witness statement in his own name for the purposes of the forthcoming liability hearing. In this document, he gave an account of the alleged protected disclosure which differed significantly from that in the claim form. In particular, he stated that, in a meeting at around 3 p.m. on 21 November 2019, Mr Pinci, Mr Clasadonte and Mr Torzi had made clear to him that there was an ‘expectation’ that he would purchase assets in the Toro Fund for his clients and that he replied that doing so would be illegal for a number of reasons, in particular the client’s mandate, ‘trustee instructions’, risk management valuations and FCA rules about the size of the relevant funds. In the same witness statement, Mr Sangiuliano referred to the 16:11 email, seemingly implying that it was sent as a result of the stance he had taken at the meeting. As we will explain, Mr Sangiuliano’s account of events was to change a long time later, when it was brought home to him that the timing on the email referred to Italian time, which was one hour ahead of UK time.

(6) At an uncontested hearing on 9 and 14 December 2021 EJ Elliott held that, in default of any response, Mr Sangiuliano’s claims succeeded save for one in respect of an airline ticket priced at a little over £100. She listed a remedies hearing.

(7) By a reserved judgment following uncontested remedies hearings on 11 April 2022 and 8 July 2022, EJ Elliott gave judgment against all five Respondents for £255,103.28. In her reasons she did not remark on the discrepancy between the pleaded case and the witness statement of 24 November 2021.

(8) On 23 June 2023 EJ Elliott set aside the judgments against Mr Pinci, Mr Clasadonte and Mr Barnardeschi and extended time for them to present response forms. The judgments against JCI Capital and Mr Torzi were unaffected.

(9) On 21 November 2023 EJ Keogh heard applications on behalf of Mr Pinci, Mr Clasadonte and Mr Bernardeschi for the claims against them to be struck out as having no reasonable prospect of success or, in the alternative, to be made the subject of deposit orders as having little reasonable prospect of success. Having heard the matter fully argued, she refused to make a striking-out order, although she did remark that Mr Sangiuliano had managed to do only ‘just enough’ to fend off the application on the critical question of whether there had been a protected disclosure. She went on to make separate deposit orders of £1,000 in respect of the allegations (a) that Mr Sangiuliano had made a protected disclosure on 21 November 2019 and (b) that Mr Bernardeschi had been an employee, worker or agent of JCI Capital in such a way as to be legally responsible for any relevant detriment. In addition, the judge made a further deposit order of £500 in respect of the allegation that the redundancy notice dated 21 November 2019 (on the metadata of which the Respondents relied as evidencing a decision to dismiss Mr Sangiuliano taken before the alleged protected disclosure) had been given because of a protected disclosure.

(10) On 19 January 2024 Mr Sangiuliano applied to make various amendments to his claim form. In particular, he sought permission to replace the pleaded case (grounds of claim, para 18) as to the particular disclosure relied upon with the account given in the statement of 24 November 2021.

(11) On 19 April 2024 Mr Sangiuliano filed a further witness statement to address the proposed amendments. This included new information about the alleged PD, including the claim that at least one of the Respondents had talked about ‘wanting to squeeze clients to make money through the lossmaking [Toro] fund’. Mr Sangiuliano also stated, for the first time, that the meeting had commenced at ‘around 3.11 p.m.’

(12) Mr Pinci then responded to the amendment application in his statement of 22 April 2024, pointing out that the 16:11 email had been sent at 16:11 hrs, Italian time, 15:11 UK time. He set out compelling grounds for why that must be so. Before us there was no attempt by or on behalf of Mr Sangiuliano to argue otherwise.

(13) This drew a swift response from Mr Sangiuliano in the form of a further witness statement, dated 24 April 2024, asserting that the meeting on 21 November 2019 had started at or around 3 p.m. and adding ‘for the avoidance of doubt’ the brand new information (nearly four-and-a-half years after the material events) that it had been a short meeting, lasting no more than about 10 minutes.

(14) The amendment application came before EJ Tinnion on 8 May 2024. For reasons explained in writing, he granted permission for some amendments but not others. In particular, he allowed amendments concerning the circumstances in which the alleged PD had been made (grounds of claim, para 15) but explicitly refused permission to amend the substance of the pleading in which the alleged disclosure itself is set out (grounds of claim, para 18). The Legal Framework

[14]By the Employment Rights Act 1996 (‘the 1996 Act’), s43B, it is stipulated (so far as relevant) that: (1) In this Part a “qualifying disclosure” means any disclosure of information which, in the reasonable belief of the worker making the disclosure, is in the public interest and tends to show one or more of the following – … (b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject …

[15]Qualifying disclosures are protected if made in accordance with ss43C to 43H (see s43A). By s43C, it is provided that: (1) A qualifying disclosure is made in accordance with this section if the worker makes the disclosure – (a) to his employer …

[16]The requirement for a disclosure of ‘information’ was considered by Slade J sitting in the EAT in Cavendish Munro Professional Risk Management Ltd v Geduld

[2010] ICR 325

. She equated ‘information’ with ‘facts’, observing that mere ‘allegations’ did not fall within the statutory protection. This analysis was qualified in Kilraine v London Borough of Wandsworth

[2018] ICR 1850

CA, in which it was pointed out that the legislation posited no rigid dichotomy between facts and allegations and that ‘information’ may comprise both: a disclosure which makes an allegation will be protected provided that it has sufficient factual content and specificity.

[17]By the 1996 Act, s47B(1) and (1A) a worker has the right not to suffer a detriment done by his/her employer or another worker of the employer in the course of employment or by an agent of the employer with the employer’s authority, ‘on the ground that’ he/she has made a PD.

[18]By the 1996 Act, s48(1A) the Tribunal has jurisdiction to consider a complaint under s47B.

[19]A claim may be pursued against a co-worker for a ‘whistle-blowing’ detriment in the form of a dismissal (Timis v Osipov

[2019] ICR 655

CA). The Claims and Issues

[20]The parties were agreed that the issue as to whether any disclosure qualified for protection under the 1996 Act turned on the following questions:(1) Did Mr Sangiuliano disclose information to the Respondents, or any of them, on 21 November 2019?

(2) If so, did Mr Sangiuliano reasonably believe that the information disclosed tended to show that a person had failed, was failing or was likely to fail to comply with a legal obligation to which he/she/it was subject?

(3) If so, did Mr Sangiuliano reasonably believe that his disclosures were made in the public interest?

[21]So much for the detailed reasoning which the legislation demands. But the real dispute before us can be summarised in much cruder terms. The stark factual conflict at the heart of this case is over whether Mr Sangiuliano ever made a relevant disclosure of anything. His case as put before us which, as we have noted, had undergone a number of adjustments since the proceedings were launched in 2020, was that, in a meeting with Mr Pinci, Mr Clasadonte and Mr Torzi at about 5 p.m. on 21 November 2021, he had made a PD in the form of a complaint about what he characterised as an instruction by Mr Pinci to Mr Ponzi in the 16:11 email to purchase assets in the Toro Fund on behalf of JCI Capital’s clients, contending that such an investment would be contrary to their interests and contrary to law. This was the only PD relied upon. But he prayed in aid a further conversation said to have taken place at about 3 p.m. the same day in which, it was alleged, Mr Pinci, Mr Clasadonte and Mr Torzi told him of a plan to ‘squeeze’ clients by making investments on their behalf in the Toro Fund. Here, no PD was claimed but Mr Sangiuliano relied on the alleged conversation as evidencing a corrupt strategy behind the 16:11 email sent (on his case) within a minute or two of the meeting ending.

[22]Mr Pinci and Mr Clasadonte told us that there had been no meeting or conversation at or around 3 p.m. or 5 p.m. on 21 November 2019. Nor had there been conversations of the kind alleged by Mr Sangiuliano at any other time on that date (or any other date). On their account, there had been a meeting with the Claimant much earlier on 21 November 2019 (probably before midday), but it had been directed to an entirely different subject, namely Mr Sangiuliano’s departure from the company. They said that this meeting had been exceedingly brief. Very simply, they had attempted to present him with a letter dismissing him for redundancy and he had refused to accept it.

[23]Mr Sangiuliano relied on three alleged detriments which, he claimed, had been applied to him because he had made a PD. These were recorded in the agreed list of issues substantially as follows:(1) Being given notice of redundancy on 22 November 2019;

(2) Being invited to a disciplinary meeting on 26 November 2019;

(3) Being denied a share of profits for the periods May to August 2019 and September 2019 to January 2020. We set out the pleaded detriments for completeness only. Given our finding on the central question of whether Mr Sangiuliano made a protected disclosure, the task of making findings on the alleged detriments and the reasons for them does not arise. Oral Evidence and Documents

[24]We heard oral evidence from Mr Sangiuliano and his supporting witness, Mr Federico Ponzi, who was employed by JCI Capital as a junior Portfolio Analyst between April and December 2019. On behalf of the Respondents, we heard from Mr Pinci, Mr Clasadonte and Mr Bernardeschi, as well as Mr Joseph Naghdi, a specialist in computer forensics who, with the permission of the Tribunal, was called as an expert witness.

[25]In addition to the evidence of witnesses we read the documents to which we were referred in the bundle of over 2,000 pages.

[26]We also had the benefit of a chronology and cast list and the comprehensive opening skeleton and written closing submissions of Mr de Silva.2 Some Contextual Facts

[27]We set out here brief findings on certain background and circumstantial matters. But we reserve to our analysis and conclusions below our explicit primary and secondary findings on the core dispute over the alleged meetings at about 3 p.m. and 5 p.m. on 21 November 2019. The 16:11 email and related matters

[28]JCI Capital provided services to three principal clients. The assets of each client were held by its depositary bank. With one client, the company had a purely advisory agreement. With the other two, it had powers to give executory instructions to the depositary bank. However, in all three cases, it was the duty of the depositary bank to determine whether any action (in the form of advice or an instruction) was consistent with the investment terms agreed between JCI Capital and the client.

[29]The 16:11 email was written in Italian. It was timed at 16:11 hrs but, as already noted, that was Italian time, the sender and recipient both being in Italy when it was sent. In his message (the translation of which was agreed), Mr Pinci wrote: ‘We will do some subscriptions for the Toro fund in the managed accounts of [names of institutions supplied] … start to write to the depositary banks … in order to open the accounts …’

[30]Although he told us that he found the email unusual, Mr Ponzio wrote at once to the depositary banks of the relevant clients. Two of them responded very 2 In introducing the parties and reciting uncontroversial, contextual facts, we have gratefully borrowed from Mr de Silva’s excellent documents. promptly pointing out that an investment in the Toro fund would be outside agreed investment guidelines because it had assets under management (‘AUM’) with a value below €100 million. The third wrote requesting the opening balance of the Toro fund. It seems that no investment in the Toro fund resulted from Mr Pinci’s email.

[31]Mr Pinci told us in his oral evidence that he had simply overlooked the minimum AUM stipulation when writing the 16:11 email. We accept that evidence.3

[32]Mr Sangiuliano described the Toro fund as ‘high risk’. In fact, it was explicitly designated in its key information document as ‘medium risk’, with a risk rating of 4 in the 1-7 scale. The Claimant’s position and prospects on 21 November 2019

[33]Several contemporary documents generated in October 2019 and thereafter attest to Mr Torzi, Mr Bernardeschi and others doubting the value of retaining Mr Sangiuliano as an employee of JCI Capital. He had been brought to London in the hope that he would bring fresh clients to the company. None had materialised. Moreover, the planned recruitment of Mr Bernardeschi made the case for retaining him all the harder to sustain. A board minute of 15 October 2019 noted that, in view of his anticipated arrival, the company was contemplating redundancies of (among others) portfolio management posts. As we have said, Mr Sangiuliano held the position of Portfolio Manager. On 17 November 2019 Mr Bernardeschi wrote to Mr Torzi setting out his thoughts following a review of JCI Capital’s business. His message included: I confirm that Sangiuliano’s role is redundant and costly in economic terms … it is a waste to burden the company with an annual cost of €150,000 for a resource managing 4 accounts that already existed when he came … Later the same day, Mr Torzi sent an email to Mr Clasadonte: … if you agree, I suggest you dismiss Sangiuliano … tomorrow morning

[34]In the event, a meeting took place between Mr Torzi, Mr Clasadonte and Mr Sangiuliano on 19 November 2019. We accept Mr Clasadonte’s evidence about what was said. Mr Torzi stated that he intended to dismiss Mr Sangiuliano, who replied to the effect that he wished to leave anyway and intended to go by the end of the year. The essence of the exchange was captured in an email sent to Mr Sangiuliano the same day referring to the meeting and asking for confirmation of ‘… your decision to leave JCI as of 31/12/2019’, although this may have elevated a statement of intent into a categorical decision. Mr Sangiuliano did not respond to the message, much less challenge its content. 3 As we explain below, Mr Sangiuliano’s contrary case, that Mr Pinci was hoping to smuggle inappropriate transactions past three depositary banks is not, to our minds, plausible. (It may be superfluous to add that it was no part of Mr Sangiuliano’s case to argue that the 16:11 email proposed, or was ever seen by him as proposing, a breach of a legal obligation owing to the AUM investment guideline.)

[35]On 21 November 2019 at 10:44 a.m. Mr Clasadonte sent a chasing email to Mr Sangiuliano, referring to the message of two days before. Again, Mr Sangiuliano did not reply.

[36]A letter to Mr Sangiuliano giving notice of dismissal to expire on 18 January 2020 on the stated ground of redundancy was prepared in the name of Mr Clasadonte. According to its metdata, it was printed on the morning of 21 November 2019.

[37]Mr Pinci booked return flights to and from London for 21 November. His evidence was that the purpose of the visit (agreed in advance with Mr Torzi and Mr Clasadonte) was to meet Mr Sangiuliano and dismiss him. Mr Pinci also gave unchallenged evidence that a one-day visit to London was, for him, wholly exceptional. He regularly visited the London office but his normal practice was to spend a week at a time there.

[38]On 22 November 2019 Mr Clasadonte gave the letter of dismissal to Mr Sangiuliano and confirmed the dismissal by an email of the same date. Events after 21 November 2019

[39]On 21 or 22 November 2019 Mr Pinci learned from an employee of a company which provided introducer services to JCI Capital that Mr Sangiuliano had contacted him, reporting that he had been dismissed and passing disparaging comments about JCI Capital. Following discussion between Mr Pinci and Mr Clasadonte an allegation of breach of confidence was raised against Mr Sangiuliano and after some delay a disciplinary hearing was arranged for 16 January 2020. In the event, the disciplinary process was not completed, no doubt because Mr Sangiuliano’s notice period was to expire only two days later. Analysis and Conclusions The pleading point

[40]We start our analysis with this question: What is the case before us? Our uncertainty arises from the repeated changes which Mr Sangiuliano’s case has undergone. We have already traced the case management history. The last chapter of relevance was the decision of Employment Judge Tinnion to grant permission to amend the grounds of claim, para 15 but refuse permission to amend para 18. The effect was that Mr Sangiuliano was left with his original pleaded case that, at a meeting with Mr Pinci, Mr Clasadonte and Mr Torzi on 21 November 2019 he had referred to the email from Mr Pinci to Mr Ponzio of the same date, complaining that it contained an unlawful instruction. This was the alleged disclosure made, on his case as presented to us, at the 5 p.m. meeting. It was not said that any PD was made at the 3 p.m. meeting and reliance was placed on that encounter only for evidential support. We have concluded that the case so put was consistent with the ‘pleadings’. The central alleged disclosure of an instruction by Mr Pinci to Mr Torzi which was not in keeping with the clients’ low risk profiles, contrary to the regulatory regime and against the law, stood. Changes of detail (in particular the timing of the relevant meeting and the new assertion that the relevant meeting was the second of two held between the same people on the same afternoon) did not, in our view, take the complaint advanced outside the scope of the pleaded case. Accordingly, we do not accept Mr de Silva’s submission, which he did not press with great vigour, that Mr Sangiuliano necessarily loses on a pleading ground alone. Accordingly, the dispute turns on our findings on the evidence. Credibility

[41]We have found this a most troubling case. It is not one in which differences in accounts can be put down to ambiguous communications, misunderstandings, exaggeration or anything of the kind. One side or the other is knowingly and deliberately putting forward a completely false story - making up a case. It is overwhelmingly clear to us that that party is Mr Sangiuliano. The key considerations for us have been the following: first, the extent to which the evidence given was consistent (or inconsistent) with contemporary documents; second, the internal consistency of the case advanced; and third, the inherent plausibility of the case advanced. We focus on the threshold issue of whether Mr Sangiuliano made a disclosure at all. In preferring the Respondents’ case on that question we have had regard to seven main factors, which we will consider in turn.

[42]The first is the absence of any contemporary allegation of a PD or of consequential detriment. On Mr Sangiuliano’s case he was shocked by what he learned on 21 November 2019 at the 3 p.m. meeting about the expectation for him to purchase assets in the Toro Fund, action which, on his case, he believed would be contrary to law. He also claimed to be shocked, for the same reasons, by the 16:11 email from Mr Pinci to Mr Ponzi, which (on the final iteration of his case) he learned about after the meeting at around 3 p.m. and formed the basis of his principled objection at the alleged second meeting at about 5 p.m. But no written complaint was made then or in numerous communications thereafter. The first time the alleged PD appears in the documents is in the letter before claim over four months after the events on which the claim purports to rely.

[43]The second factor is an extension of the first. Not only is there a striking absence of any contemporary complaint, there is also a complete absence of any contemporary reference or allusion (by Mr Sangiuliano or anyone else) to any disclosure of information on 21 November 2019 or even to anything of significance having been said at a meeting on that day. In this connection we think it particularly telling that in WhatsApp messages to Mr Ponzi within hours of the alleged PD he wrote in outraged terms about his access to Bloomberg (real-time) messaging being cut off, but there is not even a passing reference to the much more serious matter of a ‘whistle-blowing’ event.

[44]Third, we attach considerable significance to the repeated alterations in Mr Sangiuliano’s case. We will limit ourselves to three of the most spectacular examples. The first took place on 24 November 2021 (two years after the material events) when, in his witness statement prepared for the liability hearing, he said for the first time that the instruction from Mr Pinci had been to him and not to Mr Ponzi. This dramatic change of direction was accompanied by the unveiling of a brandnew revelation about a second meeting on 21 November 2019, at 5 p.m. The second major change of direction occurred on 19 April 2024, almost four and a half years after the material events, when Mr Sangiuliano first claimed that the earlier meeting on 21 November 2019 had started at 3.11 p.m. precisely and introduced the new allegation of a plan to ‘squeeze’ clients. The third notable adjustment came five days later, when Mr Sangiuliano sought to move the start of the meeting back to 3.00 p.m. and limit its duration to no more than ten minutes. This was transparently a desperate attempt to keep his case coherent in light of the damaging revelation that the 16:11 email had been time-recorded by reference to Italian time. We have mentioned three changes of case. There were many others, but it would not be proportionate to list them all here.

[45]Fourth, we have had regard to implausible or overtly false claims and explanations advanced by Mr Sangiuliano or the absence of explanations for matters which required explanation. There are many examples, of which we will take only a small selection. First, he sought to explain away the differences between his claim as now advanced and the letter before claim (and original particulars) on the basis that he had he did not read or examine those documents before approving them. We do not believe that evidence, which he prays in support of his unattractive mission to blame his former lawyers for the dramatically inconsistent narrative put forward on his behalf. Second we think it significant that Mr Sangiuliano did not respond to Mr Clasadonte’s emails of 19 and 21 November referring to his alleged agreement to leave by the end of the year. When eventually prevailed upon to answer questions about this reticence, he claimed that he had been too busy with his workplace responsibilities to attend to emails asking him about his future within the organisation. We reject that evidence as palpably absurd. Third, we reject his equally absurd theory of a dishonest plan to slip investments into the Toro Fund past the depository banks, presumably meaning that Mr Pinci and his colleagues harboured the hope that the depository banks would not take the elementary precaution of checking on the fund’s AUM status before countenancing the proposed investment. We can only regard that evidence (from someone with long experience in the financial services industry) as manifestly insincere. Fourth, we were presented with the wild allegation (or perhaps suggestion) that the redundancy letter of 21 November 2019 had been manufactured in order to misrepresent the date of its creation. There was simply no evidential foundation to support that exceedingly serious charge (or suggestion). (The fact that Mr Naghdi accepted that (although the metadata evidence had not been suspect) one could not rule out the theoretical possibility that the settings of the computer used to generate the letter might have been adjusted to override the ‘default’ automatic time recording mechanism was, to state the obvious, no warrant for the accusation (or suggestion) that anyone had in fact resorted to criminal conduct of that kind.)

[46]Fifth we were presented with demonstrably false and misleading evidence by Mr Sangiuliano concerning the Toro Fund. He was prepared to say that it was loss-making at a time when it was not loss-making. He called it ‘high risk’ but that was belied by straightforward documents in front of us (to which we have already referred) which showed that the fund was graded at 4 in the 1 to 7 risk scale. He told us that funds with assets under management below €100 million would be considered high risk but there was no possible basis for that assertion. Finally his evidence that Credit Suisse, which he referred to as ‘JCI’s bankers’, prevented a proposed investment because it was high risk’ was transparently false on two grounds:(a) Credit Suisse were not JCI’s Capital’s bankers, they were the depository bank of one of its clients; and

(b) it is simply false to say that the investment was blocked on account of it being high risk: it was blocked because the guidelines prescribed a minimum AUM figure of €100 million and the Toro Fund fell about 50% short of that.

[47]Sixth, Mr Sangiuliano’s case was not assisted by his decision to enlist the support of Mr Ponzi as a witness. Since he did not, and could not, give evidence directly on the central issue of whether any PD was made, the election to call him seems surprising. At all events, he presented as an entirely unreliable witness and cut a particularly hapless figure when answering questions about a passage in his witness statement concerning a supposed telephone conversation between him and a woman called Britel Radouane. The person he was attempting to refer to is in fact a man called Radouane Britel. We were driven to conclude that this part of his evidence was simply made up.

[48]Seventh, in contrast with Mr Sangiuliano’s, the Respondent’s case did not change and was supported in numerous instances by contemporary documents, as well as being internally consistent, rational, plausible and in keeping with common sense and practical reality.

[49]Eighth and last (and very much least) we have had regard to the manner and demeanour of the witnesses. We emphasise that this is in the scheme of things a very minor consideration but, for what it is worth, we found the Respondent’s witnesses measured and careful. Mr Sangiuliano, on the other hand, was evasive and showed himself willing to resort to brand-new evidence when he found himself cornered under cross-examination. We find that Mr Ponzi was a witness of similar quality. His reluctance to answer awkward questions was as evident as Mr Sangiuliano’s but his technique was slightly different. Whereas Mr Sangiuliano would answer (or purport to answer) a question not asked, Mr Ponzi (who gave evidence through an interpreter) would respond to a one-sentence question with a three-minute ramble which ended up not being recognizable as an answer to anything. The core factual issue - conclusion

[50]For all the reasons given, we reject Mr Sangiuliano’s case on the events of 21 November 2019 and accept that of the Respondents. The alleged meetings at about 3 and 5 p.m. did not happen. They were made up by Mr Sangiuliano for the purposes of laying a foundation for his claims. There was no PD. The only relevant meeting on 21 November 2019 was the short encounter, probably before midday, when the Respondents attempted unsuccessfully to deliver the letter of dismissal to Mr Sangiuliano. That letter was printed when its metadata said it was printed.

[51]We think it important to say that the seriousness of our findings is not lost on us. We have reached our disturbing conclusions with extreme reluctance. But at the end of our conscientious analysis we are left with no rational alternative. Result on liability

[52]There having been no PD, Mr Sangiuliano’s case falls at the first hurdle and his claims must be dismissed. Costs The law

[53]The power to make costs awards is contained in rule 74 of the Employment Tribunals Rules of Procedure 2024 (‘the 2024 Rules’), the material parts of which are the following: (2) The Tribunal must consider whether to make a costs … order, where it considers that –(a) a party … 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 … As the authorities explain, the rule poses two questions: first, whether the Tribunal has power to make an order; second, if so, whether the discretion should be exercised.

[54]Once an Employment Tribunal is satisfied that the relevant test(s) under rule 74 has or have been satisfied, the Tribunal’s discretion to make a costs award against a party is wide and unfettered: see Barnsley Metropolitan Borough Council v Yerrakalva

[2012] IRLR 78

CA.

[55]The 2024 Rules, r82 provides, relevantly, as follows: In deciding whether to make a costs … order, and if so in what amount, the Tribunal may have regard to the paying party’s … ability to pay.

[56]We are mindful of the fact that orders for costs in this jurisdiction are, and always have been, exceptional. Employment Tribunals exist to provide informal, accessible justice for all in employment disputes. We recognise that, if Tribunals resorted to making costs orders with undue liberality, the effect might well be to put aggrieved persons, particularly those of modest means, in fear of invoking the important statutory protections which the law affords them. It would be contrary to the purpose of the Tribunals if parties to disputes declined to exercise their right to bring (or contest) proceedings as a result of unfair economic pressure. On the other hand, we also bear in mind that, when our rules of procedure were revised in 2001, the Tribunal was for the first time not merely permitted, but obliged, to consider making a costs order where any of the prescribed conditions (vexatiousness, abusiveness etc) was fulfilled, and a new and wider criterion of unreasonableness was added. It seems to us that these innovations, preserved in subsequent revisions of the rules, indicate a policy on the part of the legislature to encourage Tribunals to exercise their costs powers where unmeritorious cases are pursued or where the manner in which litigation is conducted is improper or unreasonable.

[57]Costs may be assessed on the standard or indemnity bases. In Howman v The Queen Elizabeth Hospital King’s Lynn

UKEAT/0509/12/JOJ

the EAT (Keith J and members) held that in the Employment Tribunal (‘ET’) costs should be assessed on the indemnity rather than standard basis only where the conduct of the paying party has ‘taken the situation away from even that very limited number of cases in the [ET] where it is appropriate to make orders for costs’ (para 10). See also Dowding v The Character Group Plc

[2024] EAT 134

(HHJ Auerbach sitting alone). The application

[58]The burden of the costs application was that the Claimant had dishonestly and cynically pursued a series of complaints based on evidence which he knew to be false and that in so doing he had brought claims which had no reasonable prospect of success and/or had acted unreasonably in bringing them and/or in his conduct of them. Mr de Silva also relied on the deposit order as lending additional support to the application and invited us to direct assessment on the indemnity basis from the date of that order.

[59]Mr Brockley began by submitting that fairness required us to deliver a written judgment before addressing any costs application. In any event, he resisted the application, while realistically accepting that he could not go behind our findings of fact or their implications.

Conclusions

[60]In our view, it was fair and proportionate to deal at once with the costs application. It was not complex. Nor was the case on liability. Nor was the reasoning on which our oral judgment rested, which had been clearly explained.

[61]Turning to the substance of the costs application, we considered that Mr Sangiuliano’s conduct in bringing his claims had been not merely unreasonable but disgraceful. On our findings, the case was constructed on events which never happened. They were invented. It was, in our view, hard to imagine a more obvious case of unreasonable conduct in the bringing of litigation. So much for the 2024 Rules, r74(2)(a).

[62]We preferred to leave r74(2)(b) to one side. A cynical manipulator might make up claims so skilfully that the Tribunal might struggle to say, after the event, that they had had no reasonable prospect of success. The fact that they had ultimately failed would not by itself warrant that assessment. We were reluctant to wrestle with the question whether, on an objective analysis, the claims, which the Claimant knew to be bogus, were doomed to fail.

[63]In view of our finding on r74(2)(a), we also preferred to leave the subsidiary argument based on the deposit order (relying on r40(7)(a)), although obviously well-founded, to one side.

[64]Our reasoning under r74(2)(a) determines the first question identified in para 22 above. The Tribunal has jurisdiction to make a costs order.

[65]Should we exercise the jurisdiction and, if so, how? Subject to the question of means, we were quite satisfied that the Claimant’s conduct merited a costs order and that it would be unjust to the Respondents to decline to make one. We might ask, if this was not a proper case for the exercise of the discretion, what case would be?

[66]Should we take account of Mr Sangiuliano’s means? We mooted the point but Mr de Silva said that his understanding was that no reliance was placed on means. Mr Brockley did not demur and put forward no argument based on his client’s means.

[67]In what sum should costs be awarded? We took the view that the justice of the case could only be met by an order for Mr Sangiuliano to pay the entirety of the Respondents’ costs apart from those incurred in their unsuccessful strike-out application (in respect of which EJ Emery had made an order the other way). The litigation was a dishonest project from the outset. The Respondents should never have been faced with it. They are not to be criticised for incurring considerable expense in resisting it.

[68]On what basis should costs be assessed? In our view, there was much to be said in favour of directing assessment on the indemnity basis throughout. This was indeed one of those entirely exceptional cases in which, in accordance with the guidance in the Howman and Dowding cases, such a direction is appropriate. It is not merely a case of a party knowingly giving false evidence. It was a case of a party manufacturing out of thin air facts on which to build a legal claim for very substantial compensation. Fortunately, such cases seldom come before us. When they do occur, it is our duty to be clear about the conduct which we have found and to meet it with appropriate measures, including costs measures. All of this said, we noted that Mr de Silva put his costs application moderately, seeking assessment on the indemnity basis only from the date of the deposit orders. In the circumstances, we were content to grant the application as asked. Overall Outcome

[69]For the reasons stated, the claims were dismissed and the Respondents’ costs application succeeded as explained in our reasons above.

[1]By a judgment with reasons sent to the parties following a hearing on 3-14 February 2025, a Tribunal chaired by me dismissed the Claimant’s claims against the Second, Third and Fourth Respondents and ordered him to pay almost all of their costs. These reasons should be read with that judgment and those reasons.

[2]On 20 March the Claimant’s solicitor applied for reconsideration of the judgment on costs. A bundle of documents was attached together with a statement of means prepared by the Claimant. The solicitor for the Respondent resisted the application in a brief letter of 21 March. Not having seen that letter, I gave an instruction on 3 April for the Respondent’s observations on the application to be sought, which resulted in a fuller response on 14 April. The applicable law

[3]By the Employment Tribunals Rules of Procedure 2024 (‘the 2024 Rules’), rule 68(1) the Tribunal has power to reconsider any judgment where it is ‘necessary in the interests of justice’ to do so.

[4]Rule 70(2) of the 2024 Rules provides that if the Tribunal considers that there is ‘no reasonable prospect of the judgment being varied or revoked’ the reconsideration application ‘must’ be refused and the Tribunal must inform the parties of the refusal. Rule 70(3) specifies that if a reconsideration application has not been refused under rule 70(2), the Tribunal must send a notice to the parties specifying the period within which any written representations concerning the application must be delivered and inviting their views on whether it can be determined without a hearing.

[5]At the heart of the Tribunal’s procedures generally is the ‘overriding objective’ of dealing with cases fairly and justly. This includes, so far as practicable, ensuring that the parties are on an equal footing, dealing with cases in ways which are proportionate to the complexity and importance of the issues, avoiding unnecessary formality and seeking flexibility in the proceedings, avoiding delay, so far as compatible with proper consideration of the issues, and saving expense (see the 2024 Rules, rule 3).

[6]In Outasight VB Ltd v Brown [2015] ICR D11, Her Honour Judge Eady QC (as she then was), sitting in the EAT, observed that the procedural rules (then the 2013 Rules) allowed Employment Tribunals a broad discretion to determine whether reconsideration of a judgment was appropriate in the circumstances. However, she added that this discretion must be exercised judicially, ‘which means having regard not only to the interests of the party seeking the review or reconsideration, but also to the interests of the other party to the litigation and to the public interest requirement that there should, so far as possible, be finality of litigation’. The application

[7]As I read it, the application raises the following three points.(a) The Tribunal was wrong to hear the costs application before written reasons (requested at the hearing) had been delivered.

(b) The Tribunal was wrong to proceed on the footing that, in resisting the costs application, the Claimant did not seek to rely upon his means.

(c) The costs award was excessive and, having regard to all the circumstances and particularly the Claimant’s means, justice requires that it be reconsidered. Analysis

[8]It is convenient to begin with an observation about procedure. For the avoidance of any doubt, I think it prudent to state that I took no decision under the 2024 Rules, r70(2) (as to whether there was any reasonable prospect of a reconsideration resulting in the judgment on costs being varied or revoked) prior to instructing the administrative staff to invite the Respondent’s comments on the application. The comments were sought because I considered that it would be helpful to receive them before taking my decision under r70(2) and, more generally, because my judicial instinct leans against any determination being made before all affected parties have had a chance to make representations upon it. On further reflection, and having fresh regard to the particular wording of the 2024 Rules, r70(2) and (3) and the remarks of the EAT in TH White & Sons Ltd v Ms K White

UKEAT/0022/21

and Shaw v Intellectual Property Office

UKEAT/0196/20

, I accept that my approach may not have been in conformity with the appellate guidance, which generally deprecates invitations to respondents to comment on reconsideration applications before a decision under r70(2) has been given and further advises that, where such invitations are sent, they should be accompanied by a clear statement that the judge has yet to make his or her decision under r70(2). All this having been said, the point remains that, no r70(2) decision having been taken, my first duty is to address the question which that provision raises. My answer depends on whether, if the judgment on costs was reconsidered, there would be any reasonable prospect of it being varied or revoked. I will consider the Claimant’s three grounds in turn.

[9]In my judgment, there is nothing in ground (a). It simply argues that the Tribunal should revisit its decision to proceed with the costs application and refuse the Claimant’s counsel’s application for the matter to be deferred until after written reasons for the liability judgment had been delivered. That was an unremarkable case management decision. It is explained in the original reasons (paras 59-60). I see no possible reason for it to be reviewed at first instance level. And if it was reconsidered, I see no reason for supposing that there would be any prospect of the Tribunal reaching a different decision on it.

[10]Ground (b) is, in my view, equally hopeless. The Tribunal noted that counsel for the Claimant put forward no case on costs based on his client’s means. The foundation for that finding is given in the reasons (para 66). The challenge is not easily understood given that the application does not assert that counsel did resist the costs application on any ground relating to his client’s ability to pay. In my judgment there is no remotely arguable reason for the Tribunal to reconsider, much less revoke or vary, its decision to approach the question of costs without reference to the Claimant’s ability to pay.

[11]Ground (c) fares no better. The Tribunal has clearly explained why it awarded almost all of the Respondents’ costs and why it directed assessment of a substantial portion on the indemnity basis (reasons, paras 67-68). The fact that this outcome will be painful for the Claimant is not a ground for reconsideration. I see no prospect of a different outcome in the event of the Tribunal examining the costs application afresh.

[12]In the circumstances, I find no substance in any of the grounds on which the reconsideration application is based.

The issues

[13]Further and more generally, having stepped back and reviewed the judgment on costs and the reconsideration application in the round, I can see no arguable reason for reopening the Tribunal’s determination on the costs issue. The application is, in effect, simply an attempt to rewind the clock and run an entirely new case on costs. To permit that to happen would run counter to the overriding objective and would expose the Respondents to yet more unwarranted expense. Refusing the application will occasion no injustice to the Claimant. If he wishes to argue that the judgment on costs involved an error of law, he has his remedy by way of appeal. And if and when the enforcement stage is reached, he may have a fresh opportunity to raise the subject of his means.

The Legal Framework

[14]Returning to the statutory question, I am entirely satisfied, for all the reasons stated above, that if the judgment on costs were reconsidered there would be no reasonable prospect of it being varied or revoked.

Conclusion

[15]It follows that the application for reconsideration is refused under the 2024 Rules, r702.