The Respondent’s assertion of State Immunity is rejected and, accordingly, the Tribunal has jurisdiction to consider the Claimant’s claims.
REASONS
[1]The Tribunal held this Preliminary Hearing in order to consider issues, which were identified at a previous Preliminary Hearing on 28 January 2019. The essence of the matter was to consider whether the Respondent was entitled to claim State Immunity, so that the claim could not be pursued in this Tribunal.[2]The issues identified in the Order made on 28 January 2019 which were taken from the Respondent’s submissions made on 12 February 2016, when the Respondent confirmed that it did not submit the jurisdiction, were as follows:(1) Whether the Respondent qualifies for immunity under the State Immunity Act s.14, as it may not be a government department(2) Whether the State was immune on the basis that the Claimant had been habitually a resident outside the UK when the contract was made(3) Whether the immunity remains because the parties to the contract agreed that it does. On this point, the Respondent says that the contract imposes exclusive jurisdiction over the contract on the Copenhagen City Court while the Claimant cites s.4(4) of the State Immunity Act in opposition to this. Other issues were no longer relevant, as the Claimant no longer pursued the question of personal injury claim and both parties accepted the Claimant was not a member of a mission.
Evidence
[3]I heard evidence from the Claimant himself on his own behalf and from Mr Olsen, the managing director of the Respondent. I was provided with a bundle of documents, which the parties had agreed. Additional documents were added to the bundle on the morning of the first day by agreement. I was also supplied with a bundle of authorities and additional authorities.[4]The issues were clarified to some extent in the course of the hearing and I will set them out in greater detail. Issues and the Legislation[5]The parties accepted by the stage of this hearing that the Respondent was not a department or indeed the government of the state of Denmark. It conceded that it amounted to a separate entity. However, s.14(2) of the State Immunity Act 1978 provides: “A separate entity is immune from the jurisdiction of the Courts of United Kingdom if, and only if –(a) the proceedings relate to anything done by it in the exercise of sovereign authority: and(b) the circumstances are such that a State (…) would have been so immune.[6]The Respondent said that it was not necessary for me to look at paragraph (b) in any particular context. The question was, at this stage, whether the proceedings related to anything done by the Respondent in the exercise of sovereign authority. If I concluded that they did not, the Respondent would not have the benefit of State Immunity and that would be that.[7]However, if I concluded that the Respondent did have the benefit of State Immunity by virtue of s.14(2) I would then have to consider s.4 of the State Immunity Act. Subsection 4(1) provides; “A State is not immune as respects proceedings relating to a contract of employment between the State and an individual where the contract was made in the United Kingdom or the work is to be wholly or partly performed there.”[8]Section 4(1) would clearly apply to this situation but there are exceptions to it in subsection 2. Two exceptions were considered relevant to this situation. The first exception is in s.4(2)(b) which provides; “at the time when the contract was made the individual was neither a national of the United Kingdom nor habitually resident there’.[9]In relation to this point, the Respondent referred to the initial contract entered into between an entity generally referred to as “VisitDenmark” and the Claimant in 1999 at which time the Claimant was not a national of the United Kingdom nor was he resident there. The Claimant says that contract is not relevant. The Claimant entered into a total of three contracts with this entity or its successor, so there were two subsequent contracts with the Respondent. The Claimant relies on the third of those contracts and specifically argues that it stands alone and separately from the earlier ones. That last contract was, he says, in operation when he was dismissed and that the Tribunal must look at that contract which, he says, replaced the previous contract in full. The Respondent says it was merely an amended version of the prior contracts. Therefore, the question that arises is what is the status of the third contract? Is it an amendment to an original contract, which is ongoing, or is a standalone contract under which the Claimant is entitled to bring his claim, so that at that time it was entered into, he was not a national of the United Kingdom but was habitually resident here? 9. The second exception is in s.4(2)(c). S4(2)(c) provides: “the parties to the contract have otherwise agreed in writing.” Put in simple terms, this exception applies where the parties to the contract have agreed in writing that the exemption to State Immunity should not apply. On that point the Respondent says that there is a jurisdictional clause providing that the Courts of the City of Copenhagen have jurisdiction and the Respondent argues that meets the requirements of sub section 2(c). The Claimant says that that does not go far enough to amount to a sufficient agreement in writing. I have to decide which of these positions is correct.[10]Additionally, the Claimant relies on subsection 4(4) which provides; “subsection 4(2)(c) above does not exclude the application of this section where the law of the United Kingdom requires the proceedings to be brought before a Court of the United Kingdom.” On that point the Respondent says the law of the United Kingdom does not require the proceedings in question to be brought before a Court of the United Kingdom and that is not the effect of private international law. The Claimant says in practice it is the implication of the situation and its effect and that unfair dismissal proceedings must be brought before the Tribunals in the United Kingdom. Again, I have to decide which of them is correct.[11]There was an additional question of the application of human rights law and access to the Courts as provided in the case of Benkharbouche v Secretary of State for Foreign and Commonwealth Affairs [2017] ICR 1327. The Claimant says more generally that he would be penalised so that he would have no access to the Courts and thus to a judicial remedy if he were precluded from pursuing his claim and this is a breach of his human rights. The Respondent denies this. Again, the issue is which position is correct.
Facts
[12]The Claimant was initially employed by an entity called “Danmarks Turistrads kontor”. The parties referred to the employer as VisitDenmark, but in practice, the translation supplied to me translates the name ‘Danmarks Turistrads kontor’ as Danish Tourist Board. The contract took effect from 1 November 1999. Because later a new entity was created, I shall refer to the original employer as DT. There was a written contract signed on 27 August 1999 by both parties, which I shall refer to as (“the First Contract”).[13]At the time the Claimant was resident in Denmark. The Claimant is not a UK citizen, neither is he a Danish citizen. He is a citizen of Norway. The contract provided for the Claimant to work for DT at its offices in London as the market manager. There was no jurisdiction clause in that contract. The Claimant moved to the United Kingdom to undertake this role and I understand that at all relevant times thereafter he was resident in the United Kingdom.[14]A second contract was entered into by the parties dated 23 August 2000 (“the Second Contract”). That contract included three clauses that are of relevance. I have cited the translations which were supplied to me. Clause 1 of the contract provided; “This employment contract replaces the employment contract of 27 August 1999 between the parties”. Clause 2 provided; “Since 1 November 1999 the market manager has been employed with DT as market manager for England”.[15]As I have noted, in both the First and Second Contracts, the Respondent was identified in the Danish versions as “Danmarks Turistrads kontor”.[16]Clause 20 of the Second Contract provided as follows: “This employment contract is governed by and subject to Danish Law, including the Danish Salaried Employees Act (funktionaerloven) and the Danish Holiday Act (ferieloven). Apart from what follows from applicable law, the provisions of this employment contract plus the agreement of 26 November 1999 in the form of an email signed by the Market Manager, subject: “Premium Lease”, are an exhaustive statement of the terms and conditions which govern the employment. Thus, there are no collective agreements, regulations or other general or specific agreements which apply to the employment relationship. The parties have agreed that the Copenhagen City Court – and the usual appeals procedure – will be the proper venue for any disputes arising out of this employment contract.”[17]This was followed by a third contract, which is dated 29 October 2001, (“the Third Contract”). Again, the employer is the Danish Tourist Board. The contract includes at clause 1 the provision; “This employment contract replaces the employment contract of 27 June 2000 and any prior amendments between the parties”.[18]Both Clause 2 and clause 20 were as before, but some other terms were different.[19]In 2010 the Danish Government enacted an act called the VisitDenmark Act. I have been supplied with an English translation of that Act together with a translation of notes to the Bill. The notes were explanatory notes, I understand, intended to explain the need for this legislation and the contents of the Bill. I have no doubt they properly reflect both the purpose of the Act and its contents. So far as I am aware, the Bill became the VisitDenmark Act, with no relevant changes.[20]The notes to the Bill were helpful in that they explain the position prior to the Act and the need for the new entity. The notes explain that the original VisitDenmark, (which I must assume was DT), was the national tourism organisation in Denmark. It was originally organised as a commercial foundation, subject to supervision by the Minister for Economic and Business Affairs. I should note that it seems that both the Minister and the Ministry have had their name altered from time to time, but essentially, I understand that they remain the same entity of government.[21]The original VisitDenmark entity was charged with the performance of various tasks associated with the international marketing and branding of Danish tourism and development of tourism products and experiences, as well as regulatory tasks associated with the Danish Government’s tourism promotion efforts. This foundation was to be dissolved.[22]The Bill proposed setting up a new VisitDenmark as a special public administrative body. The stated objective of the Bill was to establish a more coherent and effective tourism promotion set up in Denmark. The notes explained that the new VisitDenmark was to focus its efforts on marketing and branding Danish tourism abroad with a view to attracting greater numbers of tourists who will increase revenues in the tourism industry. In addition, the intention was for the new VisitDenmark to have a relatively small and very business led board of directors. The Bill proposed to increase the involvement of and strengthen collaboration with the tourism industry. This was to be achieved partly by setting up an advisory nomination committee on which the industry and others would be represented to recommend candidates for the new VisitDenmark board of directors for final approval by the Minister. It was also partly to be achieved by ensuring that the new VisitDenmark would be able to develop and participate in partnerships with tourism industry and other central players concerning specific marketing and branding activities.[23]The new arrangements were also to involve a clearer allocation of roles and responsibilities between the public-sector tourism players in Denmark at the national, regional and municipal level as well as a strengthened coordination of the public-sector tourism promotion effort across sectors. It was expressly stated; “In future the regulatory tasks associated with the government’s tourism promotion effort will be performed by the Ministry of Economic and Business Affairs.”[24]The explanatory notes to the Bill set out the background and explained in more detail how there had been a report prepared which showed four major challenges in relation to tourism promotion. The new Act was a response to those challenges. One of those challenges was that the previous entity had a very broad portfolio of activities, engaging in regulatory activities as well as marketing activities. Therefore, there was a recommendation about a clearer allocation of roles including that the new VisitDenmark should be focused on international marketing and branding activities and that the governmental tasks relating to product and experiential development should be performed by regional and municipal players in future.[25]In order to deal with the four problems, the Act proposed a new structure for a new VisitDenmark which was to be a special public administrative body established by law. The intention was to allow for efficient pursuit of its objectives and a more flexible framework for incorporating the tourism industry’s participation. The choice of a special public administrative body was because this would allow for close governmental management and control of tourism funds and would allow for public insight. As an independent body in the government administration, the special public administrative body would be subject to government administration law.[26]The notes explained that as a starting point, the status of the new VisitDenmark would be that of a public law body for public procurement purposes, as it would be an independent legal person set up especially for the purpose of accommodating the needs of the general public, and because the State would appoint its Board of Directors. At the same time, the major part of its operations would be financed by the State.[27]In consequence of the establishment of the new VisitDenmark, the previous entity was to be dissolved and the assets and liabilities of the foundation were to transfer to the new VisitDenmark with a view to being continued within the framework provided in the Act.[28]Under the heading “Objects and activities of new VisitDenmark” the objects of the new VistDenmark were identified as “to promote Denmark as a tourist destination and thereby create economic growth in the Danish tourism industry”. It continued “the New VisitDenmark will concentrate its efforts particularly on activities relating to the international marketing of Danish tourism products and experiences as well as the branding of Denmark as a tourist destination, including amongst other things activities required to develop new markets and maintain established markets”. It also said “VisitDenmark must be able to guide and advise other Danish tourism players as to the needs and motives of guests as part of its product and experiential development activities. VisitDenmark will also be able to engage in the development of branding and marketing activities including for instance the development of new tools or methods”.[29]The explanation about the objects and activities proposed for the new VisitDenmark also made a clear statement that the new VisitDenmark was no longer the carry out certain functions of a governmental nature. These were to be transferred back to the Ministry. The new VisitDenmark was no longer to be allowed to perform tasks concerning the development of tourism and products and experiences as those were public sector tasks that would be performed at the regional and municipal level in future. In addition, the new VisitDenmark was not to perform a number of regulatory tasks any longer, including among other things tasks relating to the servicing of the Minister, political coordination and the effort to ensure favourable framework conditions for the tourism industry. The notes also explain that a minor part of the annual VisitDenmark basic grant would be transferred to the Ministry of Economic and Business Affairs, precisely because in future the Ministry would perform some of the tasks currently performed by VisitDenmark.[30]It also stated; “Notwithstanding the above, VisitDenmark may participate in Nordic, EU and OECD Tourism working parties with a view to providing input on matters relating to Denmark and gathering international data and experience. VisitDenmark will also participate in international cooperation to improve methods to document the importance of tourism and the effects of tourism promotion initiatives. However, participation in more politically-oriented international meetings and negotiations will be handled by the Ministry of Economic and Business Affairs.”[31]Under the heading “Management of new VisitDenmark” the structure of the new VisitDenmark was set out. It was to involve a board of directors and an executive board. The Board of Directors would be the supreme governing body and would be responsible for the overall management. The Board would employ an executive board to manage the day to day activities. The Minister was to set the number of Board members and the intention was that they would be appointed in their personal capacity by the Minister. The Bill explained that the Act did not provide for a government representative on the Board. Instead the Minister was to lay down the Articles of Association and any subsequent amendments were to be made by the Minister. This was to secure government influence. The Minister would have the power the remove Board members before the end of his or her term in some instances, for example if they had committed a criminal offence or acted contrary to the Articles of Association. The Act also provided for an advisory nomination committee charged with giving recommendations to the Minister on the composition of Board, except for the Chairman.[32]In practice, it seems the Act did achieve the intentions described in the notes to the Bill. Furthermore, those intentions were reflected in the detail of the Articles of Association for the new entity.[33]Under the heading “Legal Personality and Status” it recorded; “VisitDenmark is a special and public administrative body, which means a public law body which, although not a part of the administrative hierarchy of government, is subject to supervision by the Ministry of Economic and Business Affairs.” As an independent body in the public administration, VisitDenmark is subject to public administration law, including the provisions of [a list of Acts], the general principles of administrative law as well as the EU public procurement and state subsidy rules. There is no recourse to the Ministry of Economic and Business Affairs.” 33. The Act provided that the funding was to come from funds allocated in the Finance Act to the VisitDenmark activities and other funds that may be provided VisitDenmark by the parties involved. The Minister for Economic and Business Affairs would set goals and targets for its activities each year. If VisitDenmark was wound up, VisitDenmark’s assets would accrue to the State and the State would also take over all rights and obligations of VisitDenmark. In addition, the Act provided that the Minister of Economic and Business Affairs may at any time request any information about VisitDenmark’s activities deemed necessary by the Minister for the supervision purposes. The financial statements had to be audited by the State authorised public accountant who were registered accountants and subsequently submitted to the Minister for Economic and Business Affairs.[34]There was to be an annual public service agreement concluded with the Ministry of Economic and Business Affairs.[35]The activities which VisitDenmark was to undertake were also set out in the Articles. The Articles expressly provided; “VisitDenmark will not perform any regulatory tasks including servicing of the Minister, political coordination and participation in politically oriented international meetings as well as the effort to ensure favourable framework conditions for the tourism industry. If so requested by the Ministry of Economic and Business `affairs, however, VisitDenmark will provide knowledge, analysis and statistics as well as be in charge of the international cooperation on tourism knowledge and statistics in the EU, OECD, etc., see the annual public service agreement concluded with the Ministry of Economic and Business Affairs.”[36]VisitDenmark was not intended to generate a profit. Its assets were to be kept separate from the assets of the State. Financially it was an independent entity liable for its own obligations and was to control its own finances within the scope of the applicable legislation, various agreements and its Articles. Under s.9 headed “Authority to bind VisitDenmark”, the Articles provided; “VisitDenmark’s liability cannot exceed the amount of its own funds. The members of VisitDenmark Board of Directors are not personally liable for the obligations of VisitDenmark.”[37]Under the heading “Supervision” it provided; “VisitDenmark is subject to supervision by the Minister for Economic and Business Affairs. VisitDenmark must at all times, without undue delay, provide the information deemed necessary by the Minister for Economic and Business Affairs for supervision purposes. The Minister must be kept informed of VisitDenmark’s activities of major financial or political importance, including events causing major deviations from anticipated financial results already announced, material changes to VisitDenmark’s strategy or decisions of major strategic scope.”[38]When the employing entity changes in this sort of manner, there is usually a transfer which falls within the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) and the Acquired Rights Directive. However, there is no record, after the incorporation of VisitDenmark as a special administrative public body, of any communication with employees about the position. Specifically, no communication was shown to me of any communication with the Claimant, nor was any new contract issued. In fact, no one could explain what had happened. Rather there was a general assumption that TUPE applied and the effect was that the Claimant’s employment transferred to the current Respondent by operation of law and that in all other respects his contractual rights remain the same.[39]I raised the question as to whether this was the case because regulation 3(5) of the TUPE regulations provides that an administrative reorganisation of public administrative authorities or the transfer of administrative to functions between public administrative authorities is not a relevant transfer. However, the general assumption was that this was not the case and that rather, Regulation 3(4) of TUPE applied on the basis this a public undertaking engaged in economic activities, but not for gain.[40]Mr Olsen gave evidence about the day to day activities of the Respondent. I was told that the UK office of Respondent operated from the same address as the Danish Embassy with the same name, door and canteen but no access to the diplomatic parts of the building in which the Danish Embassy staff worked. It was accepted by the Respondent that this was of no significance as in the past the office had been elsewhere in London and other offices in other countries were not in the Embassy premises. Clearly this was purely a matter of convenience, and not indicative of anything more.[41]Mr Olsen said he spoke regularly to the Minister and he thought his PA spoke daily about some matters regarding press releases. He accepted that the Minister acted like a sponsor and regulator. He described going to Australia to participate in discussions regarding tourism there when the Minister did not have time to go. He also gave a presentation to Chinese officials as part of an effort to encourage Chinese airlines to fly to Copenhagen directly.[42]He explained that the Respondent undertook statistical analysis in order to evaluate potential tourist opportunities and was asked to participate in a working party group for the OECD.[43]The Board and the Minister all considered the budget. There was a process whereby the budget was prepared and considered. Salary increases were reviewed by both the Board, and the Minister, although the Minister reviewed categories rather than individual salaries.[44]A very large part of the funding for Visit Denmark did come from the Danish State. My attention was drawn to a letter in the bundle sent from the Finance Ministry to the Ministry for Business and Growth, as it was then called, dated 31 August 2010, which referred to the Act of 15 June 2010 which created VisitDenmark, and referenced the fact that under the Budget Order, it was a requirement that in circumstances where there was a finance grant amounting to Danish Krone of one million or more, and where it is expected that the grant will continuously cover half or more of the relevant institution’s ordinary operating costs, the Ministry of Finance were required to determine or agree salaries for the relevant institution staff, unless the Ministry of Finance personal directorate decides or approves otherwise.[45]The translation of the letter recorded the Ministry of Finance personal directorate consenting to the staff not being transferred to salary and employment terms determined and agreed by the Ministry of Finance, but as a condition the Ministry for Business and Growth, jointly with personal directorate, had to supervise the development in salaries for the VisitDenmark staff and ensure they were reasonably balanced, relative to the development of levels applicable within the State in order that no terms and conditions were to be offered which materially exceed what is ordinarily offered within State. There was nothing further following that up in the bundle.[46]I was also given an unofficial translation of a note dated 1 March 2019 by the Ministry of Business for Growth on the judicial status of VisitDenmark. That note addressed the statutory framework, the fact that VisitDenmark is an independent organisation within the state administration and referred to its supervision. It described the fact that it was an independent public administration entity, which enables close governmental management and control with the funds available for tourism and public oversight with its activities and said it was consequently a public administration law organisation subject to the Ministry’s supervision. It referred to the finances provided to it by the State and said it has the characteristics of a public service enterprise for the benefit of society as a whole. It also explained that it was subject to certain acts applicable to State administration, including the Freedom of Information Act and Public Procurement Act.[47]Mr Olsen made it clear that he regarded it as important for the Respondent to follow public procurement rules and to ensure that business contracts were allocated in that fashion.[48]I was given some information about the Claimant’s dismissal but as I made clear to the parties, where there is a possibility that that might need to be examined by another Court, or indeed by this Tribunal, in the future, it is important that I say the minimum necessary about it in case any statements I make appear to be findings of fact which cause difficulties for any future hearing. Submissions[49]Both parties made lengthy submissions. I was given submissions in writing and oral submissions. Respondent’s Submissions[50]I was reminded by the Respondent that the State Immunity Act of 1978 was enacted in order to effectively ratify the European Convention on State Immunity. It was pointed out that a number of the provisions in the Act reflected the European Convention. The European Convention had been followed by a further United Nations Convention on Jurisdictional Immunities of State and their Properties, dated 2004. This had been adopted by the General Assembly of the United Nations, but was not yet in force and had not be ratified by the United Kingdom.[51]There was however a Regulation of the European Parliament and Council of 17 June 2008 on the Law Applicable to Contractual Obligations, which was referred to as Rome One and a further Regulation of the European Parliament and Council of 12 December 2012 on the Jurisdiction and Recognition of Enforcement of Judgments in Civil and Commercial Matters, which was referred to as Rome Two.[52]I was told that for certain reasons Denmark was a party to Rome One, but not to Rome Two, although the United Kingdom was a party to Rome Two. It was suggested that in some respects this would inform and assist me in interpreting the State Immunity Act.[53]It was drawn to my attention that a Commentary on the United Nations Convention on Jurisdictional Immunities of States and their Property 2004, edited by Roger O’Keefe and Christian Tams had made reference to an ILC commentary and as I was given an extract from their article. That article referred to Article 2(1)(b)(iii) of the Convention, which provided: “For the purposes of the present convention, “State” means .. (iii) agencies or instrumentalities of the State or other entities, to the extent that they are entitled to perform and are actually performing acts in the exercise of sovereign authority of the State.” The article referred to the ILC commentary being remarkably reticent in relation to this and stating that the concept of agencies or instrumentality of the State could theoretically include state enterprises or other entities established by the state performing commercial transactions. It went on to say that the provision would also embrace in certain circumstances the central bank, state utilities, state tourism boards, state commodity boards, sovereign wealth funds, and the like – entities enjoying legal personalities separate from this state, established for a specific purpose and retaining some connection with it.[54]The gist of the Respondent’s submission was to consider what type of body the Respondent was, and to suggest that the language was one of public functions. It was suggested that this would not be narrowly construed, but a state entity may be performing public functions in a much broader range of matters. I was referred to the Kuwait Airways Corporation v Iraqi Airways Co HL [1995] case and the case of Benkharbouche v Embassy of the Republic of Sudan [2017] ICR 1327. I was referred to various foreign authorities and in particularly to the cases of Perrini v Academie du France, Muller v United States of America, Canada v Cargnello and Mohammed Salem El Hadad v United Arab Emirates and the Embassy of the United Arab Emirates decided on 27 July 2007. I was reminded of the reference to Lord Wilberforce’s judgment, which required the Tribunal to look at the entirety of the facts.[55]The Respondent accepted there was a distinction between what is termed jura imperii and jura gestioni. The Respondent submitted the exercise of public powers in pursuing the public good counted as a state function, so that public functions would fall into the jura imperii. In this case the Respondent argued that it was a public entity, which carried out research and analysis to assist the Minister in public policy formulation. Moreover, I was told although it could be sued, or be sued in its own right, ultimately the liabilities fell on the State. Further, I was reminded of the list of its activities, which the Respondent submitted, included various public activities. I was told that this was not a private sector marketing company. The government provided 100% of the funding for its core costs and an unofficial translation of a note dated 1 March 2019 by the Ministry of Business for Growth on the judicial status of VisitDenmark had identified the fact that it was an independent public administration entity which enables close governmental management and control with the funds available for tourism and public oversight with its activities. It was submitted that it was consequently a public administration organisation subject to the Ministry’s supervision. A large part of VisitDenmark’s activities are based on state finance via the finance act and it has the characteristics of a public service enterprise for the benefit of society as a whole. In the event of dissolution, its assets belonged to the State and the State assumed its assets and liabilities.[56]The Respondent referred me to Mr Olsen’s evidence and a number of matters which he identified he had to deal with, including regular meetings with the Ministry, his secretary being in daily contact in relation to press releases, the Respondent representing Denmark in the OECD working group on tourism, sometimes standing in on State visits to Australia, participating in negotiations with the Chinese regarding direct flights, and analysis of tourism and reports to the Ministry, an estimate of performance for the next year and regular reporting on specific analysis when asked to do so. All staff were expected to behave as public sector employees with regard to travel costs and public sector legislation was relevant to the Respondent which did not make a profit for itself.[57]The Respondent said that an establishment of such an entity was one only a State would do and while the Respondent did engage in marketing activities, it was promoting Denmark as a country, to try to drive economic growth, so its function went beyond marketing. Overall the Respondent’s submission was that the Respondent engaged in actions which were those of a sovereign authority and therefore s.14 applied and State Immunity was applicable.[58]The Respondent then moved on to deal with the exemptions in s.4(2) and said that both s.4(2) (b) and (c) were relevant. In relation to the contracts, the Respondent argued that each of the contracts treated employment as continuing. They were in the nature of amendments to the position and not distinct and separate contracts, which could be taken alone.[59]In the circumstances the Respondent argued that Benkharbouche pointed out the difference of treatment between discrimination claims, which are rights which arise from European law and other rights of a national nature which do not have the same protection.[60]In relation to section 4(2)(c), the Respondent said that Copenhagen was clearly identified as the venue for disputes and the jurisdiction clause should be construed widely and generously. The Claimant could not argue this was not a jurisdiction clause. The Respondent said that the State Immunity Act was passed so the UK could ratify the European Convention on State Immunity and therefore could not provide a lesser entitlement than the Convention itself otherwise the UK would be in breach of that Convention.[61]As far as the suggestion the Claimant could disapply s.4(4) of the State Immunity Act, the Respondent argued that it was possible for the Claimant to bring a claim in Denmark and he was entitled under private international law to do so.[62]I raised a question about this and whether there had been any undertaking on part of the Respondent to reassure the Claimant on this point and over the lunch break the Respondent drew up an undertaking for the Claimant with the possibility of a stay of these proceedings and the Respondent undertaking that if the Claimant brings a claim in the Copenhagen City Court, the Respondent will not oppose the Claimant evoking the United Kingdom’s statutory rights under the Employment Rights Act 1996 or the Equality Act 2010 pursuant to article 6 of the 1980 Convention on the Law applicable to Contractual Obligations (“the Rome Convention”). In the event the Claimant was concerned about that and so we proceeded.[63]The Respondent spent some time explaining the European regime and the international conventions.[64]In relation to s.4(4) of the State Immunity Act, the Respondent said that the UK law envisaged that claims could be brought in three places being firstly where the employee worked, secondly where the employer was based and thirdly where the parties agreed. The Respondent submitted that there is no bar to a claim, particularly where the Claimant could submit to arbitration, and he could always do that. The Respondent did accept, however, that there was no suggestion that any arbitration proceedings were envisaged or agreed in this particular case.[65]In relation to Benkharbouche, the Respondent accepted this held that s.4(2)(c) was contrary to certain fundamental rights, but the Respondent argued that the Claimant would not be deprived of those rights as he could bring those claims in the Danish courts. The Respondent referred to the fact that the Danish law would be familiar with age discrimination and in relation to unfair dismissal they had a similar right not to be unreasonably dismissed. The Respondent considered that the Claimant would be able to rely on s.98 of the Employment Rights Act 1996 in the Danish courts. In contrast the Respondent would have difficulties in that if it had to appear in the English tribunal, it would have to prepare translations for lots of documents, it would have the problem of dealing with unfamiliar legislation in an unfamiliar locality and having to bring its witnesses over to the UK. Claimant’s Submissions[66]The Claimant pointed out that the Respondent accepted that it was a separate entity and that what we were concerned with under the State Immunity Act was s.14(2).[67]The Claimant submitted that there was nothing done by the Respondent which was in the exercise of sovereign authority. The Respondent was supervised by the government, but was not part of it. The Claimant suggested that supervision was quite minimal.[68]The intention was that in creating a new entity it was not to be part of the government. The duties of the original VisitDenmark had been split. VisitDenmark was not the Danish state tourist board, that was a different entity.[69]Mr Kahn’s employment was of a private law character and not inherently governmental. His employment and dismissal were both acts of a private law character. The cases which the Respondent had referred to were different and not informative in this situation.[70]In particular, both Canada case and Muller case and El Hadad were related to consular employment. The Perrini v Academie du France case did relate to a different entity, but could also be seen in a different light.[71]As regards s.42(b) the Claimant relied on the contract (which I have identified as the Third Contract) being that of 29 October 2001. The importance of that contract was at the time it was entered into the Claimant was habitually resident in the UK and therefore that contract fell outside s.42(b). The issue of whether or not that contract could be seen to be a contract in its own right or whether it was effectively an amendment of an earlier contract was challenged by the Claimant. The Claimant said that the wording of the contract was very clear and that this replaced previous contracts and no other contract formed part of it and, in those circumstances, it stood alone and should be viewed on its own.[72]In relation to the situation in 2010, the Claimant had not believed he worked for a public organisation, rather that TUPE applied, although he had not been given any information about it.[73]In relation to s4 (2)(c), there was a choice of jurisdiction clause, but it was not sufficiently clear that it overrode the provisions of the State Immunity Act. The Claimant said that a clause which deprived the Claimant of the ability to bring claims in the UK would have to be sufficiently clear for him to understand that he was not getting any protection under local statutory legislation and the clause relied on by the Respondent did not do that.[74]In relation to the case of Duarte, it was submitted by the Claimant that the words relied on where the Respondent were a passing reference by the Judge and that he had made an incorrect interpretation of the mandatory rules. The case was a case about restrictive covenants and not about the statutory legislation. The Claimant could not bring an unfair dismissal claim in Denmark as there was no similar legislation. The reference to unreasonable dismissals provided a remedy of few months’ pay and very little else had a very different impact to the unfair dismissal legislation. Moreover, because the Claimant had not worked in Denmark, and had not been living there, it was quite likely he would not be able to raise a claim. Regardless of the Respondent’s undertaking, it was the Claimant’s belief that he would have significant difficulty in bringing any claim within Denmark at the Copenhagen City Court. Therefore, if the Claimant was not entitled to proceed with the claim in Denmark, and was not entitled to bring the claim in the UK, he would be denied a claim entirely. He had already been paid notice pay but in terms of his claims for discrimination and his claim for unfair dismissal he would find himself in the position outlined, where the Human Rights Act should apply to show that he was being denied the opportunity of a trial or a hearing. He regarded it, in his case as necessary to interpret the position in the same way. He considered that the legislation was such that the law required unfair dismissal to be brought in the Tribunal in the UK and that claim had to be brought under the English jurisdiction.
The Law
[75]I have set out the statutory provisions, which are applicable, in the section of this judgement dealing with the issues and legislation.[76]A key issue is what is the meaning of section 14(2)(a) and in particular what is meant by “the proceedings relate to anything done by it in the exercise of sovereign authority”.[77]Lord Sumption, in the case of Benkharbouche v The Embassy of the Republic of Sudan [2017] UK SC62U, described the development of the law on state immunity and he explains the ambit of sovereign authority in terms of the development of that law. On several occasions in that judgment he explains that there is a distinction between acts of a state which are protected under international law, and acts which are not, and those would fall into two categories, being act of jura imperii and act of jura gestioni.[78]Lord Sumption explains in that judgment that the rule of customary international law is that States are entitled to immunity only in respect of acts done in the exercise of sovereign authority. That is, of course, reflected in the section in question, and again in Article 2 of the United Nations Convention, and the commentary on that convention by Roger O’Keefe and Christian Tams. As the commentary records; “An agency or instrumentality of the State or other entity however, unlike a constituent unit or subdivision, does not necessarily act in the exercise of governmental authority in all circumstances, nor is it necessarily entitled in all circumstances to do so.”[79]Lord Sumption explains that State immunity was developed during the 19th and 20th centuries, primarily by municipal courts. Before the age of state trading organisations, there were few occasions for testing the limits of State Immunity. States rarely did acts in peace time within the territorially of other States, other than conduct diplomatic relations. However, there was a gradual change. The main reason for this was the growing significance of state trading organisations in international trade. Lord Sumption cites the Tate Letter addressed to the legal advisor to the State Department to the Acting Attorney General of the United States government on 19 May 1952 in which it said; “The widespread and increasing practice on the part of governments of engaging in commercial activities makes necessary a practice which will enable persons doing business with them to have their rights determined in the courts.” The resultant limitation on State Immunity was subsequently referred to as the restrictive doctrine. Lord Sumption explains how the restrictive doctrine was slowly generally adopted across the western world.[80]Lord Sumption then reaches the question of the application to contracts of employment and says that, as a matter of customary international law, if the employment claim arises out of an inherently sovereign or governmental act of the foreign state, the latter is immune. It is not always easy to determine which aspects of the facts giving rise to the claim are decisive of its correct categorisation and the courts have understandably avoided over precise prescription. He then cites Lord Wilberforce’s statement in the case of The I Congreso, which requires the Court to: “consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity.”
Lord Sumption continues explaining: “In the great majority of cases arising from contract, including employment cases, the categorisation will depend on the nature of the relationship between the parties to which the contract gives rise. This will in turn depend on the functions which the employee is employed to perform.”
[82]He also said; “The result is that the State Immunity Act 1978 can be regarded as giving effect to customary international law only so far as it distinguishes between exercises of sovereign authority and acts of a private law character, and requires immunity to be confirmed on the former, but not the latter. There is no basis in customary international law for the application of state immunity in an employment context to acts of a private law character.”[83]The judgement concluded that s.4(2)(b) of the State Immunity Act 1978, under which immunity depended on the nationality and residence of the claimant at the date of the employment contract and which drew no distinction between sovereign and private acts, was not justified by any binding principal of international law and that section 16(1), which extended state immunity to the claims of any employee of the diplomatic mission, irrespective of whether the relevant act was in exercise of sovereign authority, could not be justified by reference to any rule of customary international law. Lord Sumption concluded saying; “the result is that sections 4(2)(b) and 16(1)(a) of the State Immunity Act 1978 will not apply to claims derived from EU law for discrimination, harassment and breach of the Working Time Regulations 1998”.[84]The overall judgement concluded that other claims such as unfair dismissal were barred by those sections of the Act, but were found to be incompatible with Article 6 of the Human Rights Convention and also in the case of s.4(2)(b) with Article 6 read with Article 14 of the Convention. In consequence, only the EU claims could proceed.[85]The case of Kuwait Airways Corporation v Iraqi Airways Co (HL) 1 WLR 1147 addressed the meaning of section 14(2) in relation to a company which was not an entity of the state, being a national airline. Parts of Lord Wilberforce’s judgement from I Congreso del Partido were cited including a reference to the ultimate test of what constitutes an act jure imperii, saying it; “is not just that the purpose or motive of the act is to serve the purposes of the state but that the act is of its own character a governmental act, as opposed to an act which any private citizen can perform.” And later continuing; “It follows that, in the case of acts done by a separate entity, it is not enough that the separate entity should have acted on the directions of the state, because such an act need not posses the character of a governmental act. To attract immunity under section 14(2), therefore what is done by the separate entity must be something which possesses that character.” Conclusion Section 14(2) – Does the Respondent have the protection of state immunity?
Conclusion
[86]The first issue was whether s.14(2) was engaged and in particular whether the Respondent, as a separate entity, was immune from the jurisdiction of the Courts to the United Kingdom because the proceedings related to anything done by it in the exercise of sovereign authority.[87]The Respondent has asked me to consider the activities of the Respondent entity and suggests that the nature of it’s day to day business amounted to the exercise of sovereign authority and thus it fall within the category of jura imperii as opposed to jura gestioni. The Claimant says it was not acting in such a manner. The Respondent’s written submissions included an examination of the functions which the Claimant was employed to perform. It was noted that he was effectively the most senior person at the UK office, responsible for staff and budgets as well as the formulation of strategy of the Respondent’s activities in the United Kingdom according to the Respondent. However, it was the general activities of the Respondent, as described by Mr Olsen, that the Respondent relied upon as bringing the Respondent within the ambit of state immunity.[88]I have noted that the mere possibility of amounting to an entity of a State does not necessarily grant immunity in all cases. It is a question of the extent to which the entity is actually performing acts in the exercise of Sovereign authority of the State that is relevant as to whether the immunity actually applies to the situation in question. As Roger O’Keefe and Christian Trams comment, the provision would embrace state tourism boards in certain circumstances, but they make it clear that an agency or instrumentality of the State or other entity, unlike a constituent unit or subdivision, does not necessarily act in the exercise of governmental authority in all circumstances, nor is it necessarily entitled in all circumstances to do so.[89]I remind myself of the words of Lord Wilberforce which require me to consider the whole context in which the claim against the state is made. Importantly, he also said it is not just that the motive or purpose is to serve the purposes of the state. He also said it is not enough that the separate entity should have acted on the directions of the state.[90]I accept that Mr Olsen and his immediate staff were closely involved with the Ministry for Business and Growth, or the Ministry for Business and Development as it was formerly called. I accept that Mr Olsen was involved with the working party of the OECD, but this was envisaged by the VisitDenmark Act. I note that he attended in place of the Minister at a meeting in Australia and also gave a presentation to Chinese officials to encourage them to institute direct flights to Denmark. However, none of those activities described by Mr Olsen are activities that only a state can, or would do.[91]The explanatory notes to the VistDenmark Act make it clear, however, that the objectives of the new VisitDenmark, while being to promote Denmark as a tourist destination and thereby create growth in the Danish tourism industry, were not to be governmental. The Ministry’s role was contemplated by the enacting legislation and the Articles and was supervisory. It largely derived from its financial interest in the operation of the Respondent, together with its general interest in the promotion of tourism as an industry in Denmark. For state immunity to apply, that is not enough. To paraphrase Lord Wilberforce, what is done by the separate entity must be something which possesses the character of a governmental act as opposed to an act which any private citizen can perform.[92]I have noted the fact that the Respondent’s original functions had been reviewed and changed to an extent, by the VisitDenmark Act, which clearly set out to remove the regulatory, or governmental functions, (which might possibly have been some limited exercise of sovereign authority), and pass those functions back to the Ministry. To that extent, it seems clear that the intention and consequence of the Act was that since December 2010, the Respondent was only carrying out activities in the nature of jura gestioni and not activities which fell within the classification of sovereign authority. Moreover, there was no evidence before me to show that the Claimant was ever significantly engaged in the activities which might have been regulatory.[93]The Respondent, in the written submissions, says the Respondent’s purpose was to promote growth in the Danish economy and that was something only a State would do. The Respondent refers to the reference in the commentary by O’Keefe and Tams, which I have already referred to, but as I have noted, that reference to state tourism boards was not a general suggestion they would be covered but that they could be in certain circumstances.[94]Lord Sumption makes clear that, as the concepts behind the legislation developed, governments around the world had recognised that the activities of sovereign States have developed well beyond those original activities which were thought properly to engage sovereign immunity, now state immunity. As such Lord Sumption records, there was a move, in which a distinction was made between activities which should be protected by State Immunity and those which should not, so that ordinary citizens could properly enter into contracts with the State and have recourse to the Courts.[95]The activities of many States are mostly growing, and many States take increasingly active interest in many areas of the economy in their own countries and the interaction between different countries. They do that in multiple ways, not just through direct governmental activity. They sponsor other entities, which are often referred to in the UK as quangos. They provide money to charities. They do a great deal of other activities.[96]The case law repeatedly refers to the distinction which has to be drawn between the activities of the State, which are matters of sovereign authority, where the history of sovereign authority quite rightly protects those activities from litigation in other countries, and on the other hand, other activities where the entity, particularly an independent separate entity, must be capable of answering in a local Court. The distinction which flows through all of the cases is that the sovereign immunity, or state immunity arises, when there is something that only a State could do, as for example was the case when an airline was used to deport individuals. The deportation was an act of the State.[97]The Respondent referred to the Italian cases of Canada v Cargnello Decision number 4017/1998 and Perrini v Academie de France, Decision number 5126/1994, by way of examples when similar situations had been held to be protected by sovereign immunity. Neither case is binding on me and both depend on their own facts. I do not believe they are relevant to the particular case in question. In Cargnello, the individual worked for the General Consulate of Canada in Milan and despite arguing that his functions fell outside the range of duties which should be protected, it was held that the functions in question were contemplated as consular functions by the Italian legislation enacting Article 5 of the Vienna Convention on Consulate Relations 1963. In Perrini, the individual worked for the Academie Francaise, which was an institution which the Italian government had formally agreed to recognise as an establishment of high culture. In this case, the Italian courts clearly took into consideration the Franco-Italian Cultural agreement which had been implemented into law. There is nothing of that kind in this case. Furthermore the decision in Benkharbouche shows the Supreme Court takes a slightly different approach in any event.[98]In this case, I must consider if the Respondent’s activities are those of a State. Liaison with various entities with a view to the promotion of Denmark as a locality for tourism, and the analysis of various statistics, is not an activity which only a State could do. Attending at certain meetings such as the meeting with Chinese officials to try to persuade them to introduce direct flights, is again, not an activity which only a State would do. A State would be likely to have an interest in the outcome but other players could well do the same thing. This is effectively acknowledged by O’Keefe and Tams in that they refer to State tourism boards being potentially covered by state immunity in certain circumstances, but it is clear they do not mean such an entity would be covered as a matter of routine. I do not accept that the promotion of growth in an industry is something only a State would do, or that it is inherently a sovereign act. Promotion of tourism can be done by other entities, such as a trade organisation or indeed a commercial airline. A trade organisation may or may not receive government funds, but its activities are going to involve much the same activities as the Respondent, involving an analysis of the industry and of the opportunities and an analysis of where it is possible to expand or promote it, together with some proposals or initiatives to do the same. The fact that the Respondent received some, or even most, of its funding direct from the Danish government (not all) and that the Danish government took an active interest in it and supervised it, does not alter the fact that its activities were primarily private in character, and capable of being carried out by a private entity. In all the circumstances the Respondent’s assertion of state immunity must fail.[99]I have been asked to go beyond that and to consider the position on the rest of the legislation namely s.4(2)(b) and 4(c) and the implications of s.44 in case I am wrong in my first findings. In the light of this finding, it is not necessary for me to make any further determination, but as requested I have considered the remaining issues, although I have not determined all of them, as it is not necessary for me to do so and I am not satisfied that it is reasonable to expect me to do so, as I explain below. Which Contract applied at the time and was it an amendment or a stand-alone contract so that section 4(2)(b) was engaged?[100]Section 4(2)(b) arises where there is immunity in the first instance, which is removed by s.4(1) because of the fact the proceedings relate to a contract of employment and the work is to be wholly or part performed in the United Kingdom. However, immunity is effectively reinstated where, at the time when the contract was made, the individual was neither a national of the United Kingdom or habitually resident there.[101]The Claimant argues this applies to him because the third contract was a stand-alone contract which replaced the previous contracts and meets the criteria. The Claimant’s argument is that the second and third contracts entirely replace the previous contract and that because, by the time of the third contract, if not before, the Claimant was resident habitually in the United Kingdom this section cannot apply to him. He relies on the word “replaced” in the translation from the original. The Respondent says this is a nonsense and that the contracts are a series of amendments and the date of entry into the first contract is the relevant date at which time the parties agree the Claimant was neither a national of the United Kingdom nor habitually resident there.[102]I have given this argument careful thought because the word “replaced” is similar to the word “substitute”. It is common for English contracts to include clauses that substitute a new version of the contract for the old. Those words operate in practice, not to create an entirely new contract, but rather to amend the terms of the original contract so that the new document is the only source of reference, rather than the old combined with the new. However, I also bear in mind that the reason for this is that the statutory provisions in the Employment Rights Act 1996, which provide continuity of employment, render the implications of any new contract largely irrelevant. They mean that in practice, the new contract operates only as an amendment. It is therefore highly attractive to an English employment lawyer to view the series of contracts as amounting to a series of variations. That should not, however, be a reason for ignoring the legal implications of a new contract, if there is one. Indeed, that may be to muddle the impact of the continuity provisions of the Employment Rights Act with the reality, which is that the parties chose to enter into a new contract. The contract which was terminated was the third contract. That contract was made as a full contract setting out all of its terms and specifically intended to be a stand-alone contract. It was entered into when the Claimant was habitually resident in the United Kingdom, as the parties agree. In the circumstances I am satisfied that the Third Contract must be considered as the contract for the purposes of subsection 4(2)(b and that its provisions do not apply to re-instate immunity.[103]However, I note that the proper interpretation of the contract falls to be determined under Danish law. I was given no information about the implications, under Danish law, of the key wording, so my interpretation is based on my experience of English law and my assumption that the statute would view the contract in the same way it might view any series of contracts in another commercial sphere. If Danish law was to envisage a different interpretation, my assessment could be wrong. Was there a written agreement not to litigate in the UK which meets the criteria for section 4(2)(c)?[104]The next question is whether s 4(2)(c) applies. This is another exception to section 4(1) which provides that a State is not immune as respects proceedings relating to a contract of employment between the State and an individual where the contract was made in the United Kingdom or the work is to be wholly or partly performed there. The third exception is that the parties to the contract have otherwise agreed in writing.[105]The Claimant disputes the Respondent’s argument that the choice of law clause at clause 20, and the provision requiring Copenhagen City Court to be the proper venue for any disputes arising out of this employment contract, are sufficient to remove the exception from State Immunity with regard to contracts of employment. The Claimant says the clause is not sufficiently clear and cannot be held to have this effect. The Respondent says it does and the Respondent relies upon the European convention on State Immunity and the explanatory notes.[106]I remind myself that the relevant provision in the contract reads as follows; “The parties have agreed that the Copenhagen City Court – and the usual appeals procedure – will be the proper venue for any disputes arising out of this employment contract.”[107]The Claimant’s argument is based on the general expectation in employment law, that clauses which impact on an individual, and on their rights, should be clearly explained so that an individual could understand them. Wording which is phrased in such a vague manner as to be beyond the comprehension of an ordinary individual, is often invalid, particularly where the contract may not otherwise have the effect it might at first reading be thought to have.[108]The Respondent has referred to the explanatory note to the European Convention on State Immunity which states that paragraph 2 subparagraph c of Article 5 enables a contracting state to invoke immunity where the contract of employment contains a clause in writing providing for the settlement of disputes by a court other than that of the state. It also says that say exclusive jurisdiction is not exclusive in terms of the state’s laws if resort may be had to arbitration. The Claimant says this commentary is not binding.[109]My role is to interpret the facts of this case in the light of the State Immunity Act and with the benefit of guidance in case law. The wording of the State Immunity Act is such that the parties have to have agreed in writing otherwise than the requirement that the employer is immune as regards proceedings relating to a contract of employment. The Claimant would have understood at the time when the contract was entered into that normally any disputes arising out of the contract would be resolved in the Denmark City Court. However, the clause did not set out that the Respondent, was to have the benefit of immunity, regardless of the provisions of clause 4(1) or that the Copenhagen City Court was to have exclusive jurisdiction.[110]I have carefully considered this position. In the circumstances in question, the clause did not go so far as to amount to an agreement otherwise, meaning an agreement that the state would be immune regardless of the fact that the proceedings relate to a contract of employment and the work was to be performed in the United Kingdom. I have taken account of the Respondent’s submissions about the effect of the European Convention and the purpose of the State Immunity Act. I have read the case of Duarte v The Black and Decker Corporation and Black and Decker Europe [2007] EWHC 2720 QB. The commentary is non-binding as the Claimant says. The wording in Duarte was obiter and the main thrust of the case was about restrictive covenants. In all the circumstances, I must look at the ordinary and natural meaning of the words. I do not think that clause 20 is clear enough to meet the requirement of subsection 4(2)(c). It does not amount to an agreement to reinstate the immunity which was removed by section 4(1). Section 4(4) – Requirement for proceedings to be brought before a court in the United Kingdom[111]I am asked to look at s.4(4) of the Act. This says that s.4(2)(c) does not exclude the application of the general exclusion on employment cases where the law of the United Kingdom requires the proceedings to be brought before a Court in the United Kingdom. I have found that section 4(2)(c) is not applicable in this case, but if I am wrong in that, section 4(4) could still apply to entitle the Claimant to pursue his claim.[112]I am faced with two opposing arguments. The Respondent says that if this subsection were to have the effect of excluding employment tribunal claims, i.e. claims for which the only forum provided is the Employment Tribunal, it would have very limited effect. I am also told that as arbitration is an option, the clause cannot have that effect.[113]First, I have to consider whether section 4(4) appears to be engaged in that I have to ask myself if the law of the United Kingdom requires the proceedings to be brought before a court of the United Kingdom.[114]The claims in question are first unfair dismissal and secondly age discrimination. Both are claims which arise under the statutory provisions of the relevant acts and both expressly confer jurisdiction on the Employment Tribunals and, in some circumstances, the county courts.[115]I have to disagree with the Respondent’s assertion that if section 4(4) bore the meaning asserted by the Claimant, section 4(2)(c) would be of little or no effect, because there are clearly claims which fall outside the Employment Tribunal’s jurisdiction, such as restrictive covenant claims.[116]Additionally, this subsection recognises there could be some claims which can only be brought in the courts of the United Kingdom and the question which arises in my mind is the opposite of the question raised by the Respondent. If this was not to refer to matters such as employment tribunal claims, what could it possibly refer to?[117]There was no expert evidence before me that the Claimant’s claims could be brought in the Danish courts. Without that, I cannot assume the Respondent is right. I understand the Respondent’s submissions about the effect of the various Conventions. However, my view is that this question should be left to one side, as it is not necessary to determine it, but if it becomes necessary, the parties must attend with expert evidence to explain whether it is the case that the Copenhagen City Court would accept the Claimant’s claims and apply the relevant legislation to them. Without that, I would have to assume that the section is specifically addressing the mandatory provisions of English statutory employment law including unfair dismissal and discrimination in employment, which have been raised in these proceedings. Human Rights law – would the Claimant be left with no access to a court if he is not allowed to bring his claim in this tribunal[118]This issue raises similar questions to the previous one. On the face of it, and following Benkharbouche, it would seem so. The Respondent says the Claimant would be able to go to the Copenhagen City Court. The Claimant says he doubts it. Without expert evidence on the point, I cannot decide it. Generally[119]Finally, the Respondent says it would be disadvantaged by having to come to the Employment Tribunal in the UK as so many documents would need translation and the Danish witnesses would have to come to London. I reject that. The Respondent has already shown it can translate key documents. Additionally, the Tribunal has facilities for evidence to be given by video.[120]Since the Tribunal has jurisdiction, the matter will be listed for a Preliminary Hearing at which case management directions can be given for the future conduct of the matter.
Conclusion
[1]The claim for failing to give written reasons for dismissal is dismissed on withdrawal. The age discrimination claim fails.[3]The claimant was unfairly dismissed by the respondent, but there is no award for unfair dismissal having regard to the claimant’s conduct.
Conclusion
[1]This is a claim of unfair dismissal and age discrimination. The claimant was dismissed on 30 September 2014, the effective date of termination being 30 June 2015, following concern about payments made to his son’s company. The respondent denies age played any part in the decision-making, denies the dismissal was unfair, and asserts that if it was unfair, a different process would have made no difference, or any award should be reduced for conduct, having regard to matters discovered after he had left.[2]The claim was presented on 25 November 2015, and has unfortunately taken a long time to reach a final hearing. When the claim was served, the respondent asserted sovereign immunity and the case was then stayed awaiting the Supreme Court decision in Benkharbouche, handed down in October 2017. A case management hearing in January 2019 fixed a preliminary hearing on jurisdiction In May 2019. The tribunal ruled, in a decision sent to the parties on 11 June 2019, that the English tribunal had jurisdiction. The respondent then filed a substantive response to the claim on 11 November 2019. What was to have been the final hearing, starting 11 May 2020, was tpostponed because of pandemic restrictions and relisted for March 2021.[3]The hearing was conducted remotely, with access to the public, although in fact no one unconnected with the case observed the hearing. We were confident that all participants had adequate equipment and technical help.
Evidence
[4]The tribunal heard evidence from: Henrik Kahn, the claimant Alexander Kahn, director of Timgu Ltd, and the claimant’s son. Helene Krieger von Lowzow, marketing coordinator employed in Copenhagen 2010 to 2012, gave some evidence about knowledge of Timgu within the organisation. Vidar Morch, marketing director, Norway until 2016, gave evidence about the practice of prepaying invoices at the end of the year. Jan Boesen Olsen, the respondent’s CEO, based in Copenhagen, who dismissed the claimant. Flemming Bruhn, the respondent’s finance director, also based in Copenhagen. Marianna Staal, head of finance and administration for the UK and Norway, based in London.[5]Mr Olsen and Mr Bruhn gave evidence with the assistance of a Danish language interpreter. Their witness statements were in English, without a Danish original, and it was explained that they gave instructions to their solicitor in Danish and he then wrote an English language statement for approval.[6]There was a hearing bundle of 886 pages, including some, but not all, of the Danish originals of translated documents, and a supplemental bundle of 196 pages, plus a PowerPoint presentation. Part way through the claimant’s case he sought to adduce a schedule of invoices which listed a few (four or five) not included in the bundle, but the claimant was unable to produce these items.
Findings of Fact
[7]Having heard all the evidence, we set out our findings of fact, but it is important to remember that not all these facts were known to the respondent at the time.[8]The respondent is the national tourist organisation of Denmark. It was not a large employer. At the time of dismissal it employed 137 people in eight offices. Its head office was in Copenhagen.[9]The UK was Denmark’s fifth-largest market for tourism. At the time of dismissal the claimant was the respondent’s Marketing Manager or Director (‘markedschefen’) for UK and Ireland, working from their office in the Danish Embassy in London. He had a staff of 10 or 11 people reporting to him. From 2010 to 2014, the respondent’s UK expenditure ranged from £940,000 to £2.7 million, about 4 - 9% of its total expenditure. Of this, £84,000-£149,000 was an overheads budget which the claimant could allocate with minimal reference to head office. He approved for payment invoices submitted to London office, with a counter signature from the local finance officer.[10]The claimant was first employed on 1 November 1999 by the Danish tourist board (Danmark Turistrad -DT), a commercial foundation supervised by the Danish Minister for Economic and Business affairs, reliant on government funds, and carrying out both commercial and regulatory functions in tourism. It was subject to the Danish Public Administration Act. Before 1999 he had spent five years working for “Wonderful Copenhagen”, the city’s tourism marketing organisation.[11]In 2010, (as described in the judgement of May 2019), the tourist board was reconstituted by statute, the Visit Denmark Act, as a public administrative body promoting tourism in Denmark, shorn of its regulatory function, with close government control of its use of public funds. Contract Terms and Procedures[12]The claimant has had various contracts of employment in largely similar terms; the most recent was signed in 2002.[13]Clause 5 provides that he is: “not entitled without written consent from the DT executive board in each individual case to be directly or indirectly interested in any business or activities, whether actively or passively, or take any other paid or unpaid employment or engage in any paid outside duties. The same applies for any unpaid outside duties which would require some of the market managers time”.[14]Clause 16 provides: “in case of extreme neglect or breach of contract employment relationship can be terminated with no warning”. Clause 17 provides that during his employment and afterwards he has a duty of confidentiality to the company “in relation to any relationship or information about the organisation during his employment and should not be brought to a third party under any circumstances”. He was entitled to 9 months’ notice of termination, whereupon the employer will pay the cost of moving back to Denmark, unless he had been dismissed for gross negligence. Clause 20 states that Danish employment law and holiday law applies, and that the Copenhagen court is agreed as the court of arbitration for the contract.[15]Within the supplemental bundle is an employee handbook (we have the April 2014 edition) which goes into much detail on local practice (down to the washing up of coffee cups in the office kitchen) and includes a number of policies – on discipline, grievances, equal opportunities, and bullying, but none on gifts, corruption or conflict of interest, nor any reference to the Danish Public Administration Act. When the respondent dismissed the claimant, it did so by reference to this Act.[16]The Danish Public Administration Act states that it applies to “all public administration bodies”, and also to “all activities of independent institutions, associations, foundations, et cetera which are established by or pursuant to statute and independent institutions, associations, foundations, et cetera which are established under private law and which perform large-scale public activities and are subject to intensive public regulation, intensive public supervision and intensive public control”.[17]The section relevant to this case, setting out the procedure which the respondent believed it followed when dismissing the claimant, is section 19, providing that where a decision is to be made by an administrative authority, then: “if a party cannot be assumed to be aware that the authority holds certain information on the facts of the case or external professional assessments, no decision may be made until the authority has disclosed such information or assessments to the party and given an opportunity to comment. However, this only applies if the information or assessments are to the detriment of the party in question and of considerable significance to the determination of the case”.[18]The other relevant section concerns decision-making where there is a conflict of interest. Section 3, on disqualification, provides that: “any person employed by or acting on behalf of a public administration body is disqualified from being involved in a particular matter” where “he himself has a particular personal or financial interest in the outcome of the matter…”, or “his spouse or person related by blood or marriage… has a particular personal or financial interest in the outcome of the matter”, or “he is involved in the management of or is otherwise direct closely involved in an enterprise, an association or other private legal entity which has a particular interest in the outcome of the matter”, or “there are other circumstances which are likely to cast doubt on the relevant persons impartiality”. However, by section 3 (2), there is no disqualification if there is “no risk that the determination of the matter may be affected by irrelevant considerations”. The disqualified person may not make decisions or be involved in administrative processing. Section 6 states that anyone who is aware of circumstances relating to himself in section 3(1) “must notify his superior at the relevant authority as quickly as possible unless it is obvious that such circumstances are of no significance”.[19]The claimant has said he was not aware the Act applied to his employment. When challenged that he must have known of it as he had been in public employment from 1994, he said: “I thought we were more private than that” (referring to the respondent’s post-2010 status). We could find no specific mention of the Act in the handbook or the claimant’s contract. E J Walker’s judgment of June 2019 however found that the Visit Denmark Act of 2010 listed the Public Administration Act as applying. (It may be in the schedules, as it is not mentioned in the text in our hearing bundle).[20]Mr Bruhn gave evidence that as interim CEO in October 2010 he had conducted briefings in Copenhagen for all managers, including the claimant, on the transition in status, and that in explaining what changes the Visit Denmark Act brought, he had listed the statutes applying, including the Public Administration Act, although without going into the detail of each.[21]It is common ground that at that meeting, the claimant approached Flemming Bruhn, in the context of the contractual term on engagement in other enterprises (clause 5) to ask whether it would be in order to give fatherly advice to his son who was setting up a business. Mr Bruhn indicated his assent, and that he could also attend a few meetings outside office hours. Neither side says that anything else was discussed in connection with his son’s business. Mr Bruhn recalled being asked by another employee if he could help coach his son’s football team, and having replied that was in order if it was outside office hours and did not interfere with his work. Timgu[22]It was also in October 2010 that the claimant’s son, Alexander Kahn, who had previously worked for Google in Dublin, registered a UK company called Timgu Ltd with two other ex-Google colleagues as directors.[23]Alexander Kahn, when still working for Google, had, at the claimant’s instigation, assisted the respondent in the autumn of 2009 to remove all traces of a brief but disastrous digital marketing campaign that had caused great public offence in Denmark after it went viral, leading to the resignation of the CEO, Dorthe Killerich. Flemming Bruhn had then acted up from late 2009 until a replacement CEO started in early 2011.[24]On 13 and 16 December 2010 the claimant authorised a payment of £16,000 in total to Timgu, over a number of invoices where the work was not specifically identified. It is common ground that these were prepayments, for services to be rendered.[25]On 2 January 2011 Mr Olsen became Visit Denmark’s CEO. A head office project called AdSense had been initiated to explore digital marketing using Timgu. It was expected to be profitable, but after four months of exploration, with a number of meetings, it was brought to a halt. The reason was bluntly explained to Alexander Kahn by Ghita Scharling on 6 July 2011. Timgu had not covered the target group, or given exposure across all sites as briefed, the budget had not been used as intended, reporting was unsatisfactory, the fee was too high, and there were “astoundingly poor results”.[26]In May 2011 the claimant authorised the payment to Timgu of £1,100 for work in Ireland, from the US office. The claimant said this was an inter-office transfer enabling payment by London for work on the UD budget to avoid foreign exchange costs, but there is no documentation showing how the US office took the initiative to seek the work.[27]From that date it does not seem that Timgu did any work for the respondent that did not originate from the London office. A payment was made by London in July 2022 of £1,131.43 for a banner, on 19 December 2011 of £1,500 for a campaign on North Jutland, and another on 27 December 2011 of £9,000 for an unspecified online marketing campaign. The respondent’s London staff saw this last as another prepayment. To the tribunal, the claimant said it was for a Christmas cottage campaign in November and December, (unless he meant the north Jutland campaign), but this was the first time this explanation was given. The invoice itself was sent to the claimant by Alexander Kahn on 12 January 2012 with the message: “see the attached, is everything fine with this invoice?”, and two weeks later the payment was made. In February 2012 Helene Krieger von Lowe (a finance officer) queried this £9,000 invoice with the claimant, asking whether “this is something I should know more about or is it something to do with the Olympics”. The claimant said it was the Olympics, and that the Vibeke Oliver (London marketing manager) had the money.[28]In February 2012 the Timgu partnership was splitting up, with the two Finnish directors taking their own course. In the course of dialogue about the cash and various office bank accounts Alexander Kahn said that the money received in London in December had been spent on salaries. The respondent argues this shows the claimant used prepayment to relieve a cash flow difficulty for Timgu.[29]In April 2012 the claimant told his son that the budget spend on Facebook and Google had been increased. In evidence he said he would have told any supplier this. This budget was for a promotion campaign run through the London office at the time of the London Olympics (July-August 2012). The claimant organised a houseboat to provide hospitality for visitors during the Olympics, with his wife Brigitte providing the catering, and at one such an event he introduced Alexander Kahn to Jan Olsen. The claimant cites this meeting as showing that Jan Olsen knew that Timgu was linked to the claimant, and was working for Visit Denmark., Jan Olsen’s recollection is only that he was told at a social event that Alexander had done some work for the company, and was shown an app he had produced free of charge. He was not aware that the son’s business was doing paid work for Visit Denmark, and there was no reason why he should, as he did not, as CEO, review the detail of supplier invoices.[30]At the end of 2012, on 21 December, the claimant authorised payment of three invoices to Timgu totalling £6,000. They were in general terms stated to be for digital services – Facebook, newsletters, SCO display ads and Google. In almost all cases the invoices showed the claimant as the contact person or ‘bearer’. The respondent says this was another prepayment.[31]In 2013 Timgu received £1,644 for a Ryanair campaign, while at the same time being told the respondent’s partner, the Norwegian tourist board, on a similar campaign had preferred their own digital supplier. In July 2013 Timgu was paid £2,935 for an AdWords campaign, again where the claimant was the “bearer”. In December 2013 there were two small payments of £200. Unlike the previous years it does not appear there was a substantial invoice paid at the end of December by way of prepayment.[32]The claimant and Vidar Morch gave evidence that if at the end of the year there was money left in that year’s budget, it was accepted practice to make prepayments to suppliers for work commissioned for the coming year. This was strongly disputed by Flemming Bruhn, the finance director, whose evidence was that any prepayment must be authorised by head office, and then for a sound financial reason, such as the discount given in Germany for paper supplies if paid in November. It was also his evidence that since the 2010 Act the respondent could bank underspent budget allocation as “equity”, so there was no pressure to spend surplus budget in a given year. It is possible that the practice of some local managers escaped head office scrutiny, and also possible that at an earlier stage of the organisation budgets did have to be spent down by the year end, but we noted that the claimant did not make prepayments to other suppliers. The January 2014 Appraisal[33]At some point in 2013 Mr Olsen was told by London staff that they were concerned about the claimant’s extensive use of Timgu, given the family connection, and that they were not being asked to get estimates for digital work from other suppliers. He decided to raise it with the claimant at the annual appraisal, which took place on 22 January 2014.[34]By English standards, even those of small organisations, this appraisal process was very light on paperwork. Mr Olsen did not keep any notes, apart from some jottings in a notebook which he had discarded by the start of this litigation. This seems to have been his usual practice – he had kept no notes of the claimant’s appraisal in 2012 or 2013, nor was there any central record in HR. Nor did he send follow up emails. He was concerned with the broad picture. His evidence is that at this meeting he raised the claimant’s use of Timgu as a supplier as a conflict of interest, and said it had to stop. The claimant’s evidence is that nothing at all was said about Timgu, whether at this meeting or at any other time. The claimant disclosed a set of handwritten notes he had made on a pre-printed appraisal form, dated (in print) February 2014, which dealt extensively with various projects and targets, but said nothing about Timgu. The respondent is deeply suspicious of this document and believes that it was written after the event, sometime after 27 August 2014 when the claimant was first told that he had breached the instruction not to use Timgu again, and for the purpose of this litigation. Mr Olsen’s evidence was that these forms were only introduced later in 2014.[35]Employment tribunals are not unfamiliar with parties asserting that an inconvenient document is a fake, and are usually sceptical of such assertions, but for a number of reasons we concluded that the claimant was at least capable of putting together a document to boost his case. Among these reasons are the fact that he switched explanation from question to question during cross examination, gave evidence in re-examination of 12 Timgu invoices not in evidence until then, and most disturbingly, that during a five-minute break in the hearing when he had twice been given the warning not to speak to other people about the case, especially important as his son Alexander was in the next room, he left his microphone on and was heard talking (in Danish) to another man at some length. Asked at the end of the break by the tribunal about him being heard speaking to another person, he replied that he had gone for a cigarette break and been talking to his wife. Challenged by the respondent’s Danishspeaking solicitor, who had also overheard, that he had been discussing the questioning with a man, Alexander Kahn interjected that he had been advising his father to answer the question directly. What troubled the tribunal was not so much the content of his discussion with his son, more the fact that when challenged he had given an evasive and manifestly untruthful answer. We therefore concluded that the claimant might well have stooped to fake a document purporting to be a contemporary record the content of the appraisal meeting that omitted any reference to Timgu. The claimant did not explain why the printed date was February.[36]In deciding what was said, we allow that the document might be genuine (for example, speculatively, if a document had been printed for a meeting that was unexpectedly brought forward), and that the notes may be confined to responses to the printed questions on the form, and make no note of supplementary matters, such as use of Timgu, either because there was no printed question to answer, or because the claimant disagreed with what he was being told. Against Jan Olsen’s insistence that he did have the discussion on using Timgu, is the fact that if the instruction to stop using Timgu was important, most people would have thought it business-like to have confirmed that in an email - though again, most managers would keep some record of their appraisals.[37]The only other evidence on what was said on 22 January 2014 came from Marianne Staal, the London finance officer. Her evidence was that as the appraisal meeting ended, the claimant went out for a smoke, and she took the opportunity to ask Mr Olsen whether a person previously made redundant by the respondent might be coming back to work for them in London. He replied that over his dead body would that person be coming back, or, he went on, (unprompted) the claimant’s family work for Visit Denmark in future, and if Timgu was used again, she was to inform him. When giving evidence it became clear in cross-examination that there had been some disagreement between the claimant and Ms Staal in March 2014: whatever he had said or done, she was deeply upset about it and called him a bully. We considered the possibility that there had been no instruction from Mr Olsen in January, and that when in August she told Mr Olsen that two Timgu invoices had come in, she was just reporting the use of Timgu in the same way and for the same reason as it had been reported in 2013, because staff were uneasy about the family connection, and because she resented Mr Kahn and wanted to get him into trouble. We ended by rejecting that possibility, concluding that the significance of her conflicted feelings arising from the episode in March was that they lay behind her decision not to report the first invoice (see below) and then not know what to do when the second and larger one came in.[38]After careful discussion, our conclusion was that Mr Olsen did tell the claimant in January 2014 not to use Timgu again. This was not a warning, in the formal sense that the claimant was told that if he disobeyed, there would be disciplinary consequences. There was no mention of consequences, he was just told to stop.[39]Mr Olsen’s reason for giving this instruction was that in his mind it was nepotism; it was wrong that public money was used for the benefit of the claimant’s family at the claimant’s direction. The claimant should step aside from such decisions. The Marguerite Project[40]In Denmark there is a scenic route called the Marguerite route (the direction signs were marked with daisies). The claimant had the idea of promoting this self-drive route on the respondent’s website, with links to accommodation, and asked his son to work on it.[41]On 18 July 2014, the Vibeke Oliver left and was replaced by Margit Klemmensen. At around this time most of the London staff went on a trip to Denmark, followed in many cases by annual leave. On 21 July 2014 Alexander Kahn sent his father an email headed “re-: Marguerite route project plan”, saying, “hi dad, I attach my pitch, but you might want to take a look”, inviting him to discuss it. A number of emails followed during the day and into the next, dealing with the detail and costing, concluding with Alexander Kahn attaching the new version, and saying: “you can obviously sell it on to your partners et cetera” . (Meaning other offices within Visit Denmark). Within the hour the claimant sent it on to HelleThomsen “this is a proposal for a solution for the Marguerite route map as well as budget. Peer support 300 per month is for a minimum term of 12 months”. Helle Thomsen was the new online manager in London, still under probation. A few days later Alexander Kahn raised a technical problem with his father, saying he was did not have Helle’s email (so demonstrating she had not been involved in the project) , and the claimant forwarded it to her that night. The on 30 July Timgu submitted an invoice for a Marguerite route initial payment of £1,200 naming Helle Thomsen as the bearer. On 12 August, after hesitation, Marianne Staal put it on the system for payment. On 13 August Alexander Kahn wrote to Helle Thomsen: “I’ll send the second invoice for £3,250 to be settled, the final invoice would then be due once we have finalised the entire project and have integrated on your site listings et cetera you have requested”. Ms Thomsen cautiously explored with him whether there would be any extras. She said later she was unhappy that she was having to sign a contract without any prior involvement of knowing if the price was reasonable, but did not want to cross the claimant when still on probation.[42]A week or two later the claimant was in correspondence with Visit Denmark’s Netherlands office about the cost of translating the Marguerite route site into Dutch. The claimant relies on this as evidence that the London was not the only office instructing Timgu, but it seems clear to us that the online Marguerite project originated in and was run from London, and that this was an example of the claimant marketing it to his partners in other offices.[43]On 21 August the claimant asked for his six month bonus, and was paid a bonus for the idea of promoting the Marguerite route online. Initial Investigation[44]On 22 August 2014 there was a telephone call between Jan Olsen and Marianne Staal. We do not know who initiated the call, but in the course of it she told Mr Olsen that there were now two more invoices from Timgu. She had put one on the computer for payment on 12 August, after delaying because she was wondering whether to pay it or tell him. Helle Thomsen, she reported, had felt under pressure from the claimant to sign the invoice, while concerned that she had no comparison for assessment of whether the price was good, and had not herself commissioned Timgu for all the work.[45]Jan Olsen asked Annette Zerrahn in HR to investigate. She spoke to Marianne Staal and followed it up with an email on 26 August about help uncovering “what has happened at the UK office in relation to the collaboration with Timgu”. She asked for all material on any written agreements between Visit Denmark and Timgu, invoices and statements of account to show what was paid, did the invoices contain information about dates and meetings, did all UK employees know about the collaboration, or just her, Katrine and the digital marketing manager, and had they been told not to talk to others about it. She wanted a clear picture. In reply, Marianne Staal said the association began in 2009 when Alexander Kahn was still at Google and had helped get the worst “dirt” of the illfated marketing campaign off the Internet. She sent Ms Zerrahn all invoices back to 2010. She not seen any agreement. She and her finance colleague both thought that the claimant had made the invoices. She remarked on invoices being sent in at the end of the year if there was room in the budget. The collaboration with Timgu was not a secret but the arrangement felt wrong. Other companies did not get the chance to bid, and the agreements were “let in through the back door”. Of the last two invoices on the Marguerite route, “this just after VO had left and when MHK was away from the office. It was Helle, our online manager, who sits with the project, and she has expressed her resentment that she was not involved in the decision-making as to which online company was chosen, and that she felt it was forced upon her. For your information – VO refused to work with Timgu and requested proposals from other online companies in connection with the project in 2013.” She recommended getting more information from Finn Larson, head of IT in Copenhagen. Late that night she added that there were a number of counterinvoices on the big invoices in 2011, 2012 and 2013, so these were in and out arrangements. She suggested this was so Timgu could get commission from Google (something the claimant disputes and which was not explored in evidence; neither the claimant nor his son mentioned counter-invoices).[46]Jan Olsen discussed this with the chairman and deputy chairman of the board, Jens Willumsen and Kjeld Zacho Jorgensen, and with the deputy managing director, Lars Erik Jonsson. They decided there was a strong case for finding the claimant guilty of gross misconduct and to consider dismissing him, and that as he was employed on a contract under Danish law, they should follow Danish procedure. Dismissal Consultation[47]On 27 August Jan Olsen met the claimant in London, and there handed him a four page letter in Danish; the English translation is headed “consultation on contemplated dismissal.” This letter informs the claimant that Visit Denmark is contemplating dismissing him from his position as market manager in London, for “cooperation issues, more specifically abuse of your managerial authority as well as disloyalty towards your immediate superior”, which, allowing for nine months notice, would make an effective date of termination on 30 June 2015. There follows a recitation of events, including Jan Olsen being told in late 2013 by London staff about the use of Timgu, the amounts involved, and that the claimant’s sons owned it. The claimant had chosen to use them as digital services provider without enquiring into alternatives, and had asked the staff to use them. His superior had told him in January 2014 that it was not acceptable to deal with family members on Visit Denmark’s behalf “with a view to providing them with a competitive and economic advantage, thus engaged in nepotism”, and that there was to be no new dealing with Timgu. His superior had been informed on the Friday afternoon, 22 August, of new dealings with Timgu amounting to £4,800. He had been “acting in bad faith”, had failed to comply with the express verbal order on 22 January, and had shown both disloyalty and lack of managerial judgement in exercising his managerial powers. His conduct had “also given rise to significant concern on the part of the executive board” as to his ability to engage in a professional relationship with the executive board and his staff. He was to be released from his duties with immediate effect until the decision was made, to protect his staff, and in view of the breach of trust between himself and executive board. He should return his access card, and his Internet access would be temporarily shut down so that Visit Denmark could have free access to relevant information about dealings between London office and Timgu and to ensure that no documentation would be lost. Before a final decision was made, he had an opportunity under section 19 of the Public Administration Act to submit comments, by 10 September. If desired, he and a companion could discuss the matter first, arrangements were to be made with Jan Olsen. No documents accompanied this letter.[49]On being handed the letter the claimant did not reply, but instead telephoned his wife to say that as she had predicted it was being claimed that he was working with his son. There was then a short discussion about whether the claimant could leave on improved terms - he seems to have been told in reply that he was lucky to get nine months notice. The claimant said nobody in London was unhappy with Timgu’s services; Jan Olsen replied that he had heard differently from staff and Ms Staal was called in to confirm this. The claimant became enraged. After sending some emails from his office computer to his private address he left.[50]Mr Olsen had intended to set an out of office reply for the claimant saying that he was on leave, with a more forthcoming communication for senior management, but unfortunately what was in fact posted that night was a message that the claimant had left. When the claimant protested next morning about it, deeply hurt, it was taken down at 10 a.m., but at least three members of staff had seen it and no doubt the content made its way onto the grapevine.[51]The claimant consulted a Danish lawyer, who replied on his behalf on 7 September 2014. She stated that Timgu had provided Visit Denmark with both transnational campaigns, and local campaigns in the Netherlands and Germany, with services requested by head office or by individual market offices. She named six people at head office as having requested Timgu’s services, and at local offices, Ghita Sorensen in Italy, Mathilde Henriques-Nielsen in the Netherlands, and Vibeke Oliver in the UK. It was denied that the claimant was the driving force behind any of these projects, or that he had been involved in the implementation or conclusion of any contracts. He had not instructed London office to use Timgu, and they have been asked to get quotations from more than one provider before making a decision, with the sole exception of the Marguerite project where a verbal price indication had been obtained; in addition the project was being managed by Helle Thomsen. He provided figures (estimated in the absence of access to his email and accounting records) of payment to Timgu of about three-quarters of the amount stated by the respondent, and out of that on only 40% was the claimant the bearer. Head office had signed off on payments, and Jan Olsen had met Alexander Kahn in the summer of 2012. He had also been awarded a bonus for the Marguerite project, at a time when managers were “obviously aware” that most of the recognition was attributable to Timgu’s work. On the alleged warning, it was denied that Timgu had been discussed on 22 January (or even that there had been a meeting then), and asserted that relations between the claimant and one of Timgu’s owners were common knowledge within Visit Denmark, and had never been raised with him. Had such a serious allegation been made it would have been put in writing. The point was then made that a decision to dismiss had already been made, without the claimant’s input, given the out of office message posted saying that he was no longer employed; a message intended for managers said it had been decided that the claimant would “no longer be employed as market manager at our London office”. Accordingly they had flagrantly disregarded consultation rules, and this would be taken to the Parliamentary Ombudsman. Finally, it was asserted that in view of the manifest untruth of the allegations, the reason for dismissal must be age, noting that “in recent years during conversations .. you have confronted my client on several occasions with his age and questions as to whether it would be a good idea for him to consider retirement soon”, and lack of agreement was met with “a facial expression signifying frustration and annoyance”. She asked that Visit Denmark present evidence at a meeting, to show that departments other than London had dealt with Timgu. Further Investigation[52]Annette Zerrahn was asked to investigate the specifics of this letter, but there was no meeting. Information was provided by Janne Gronkjaer Henriksen, Agnete Sylvester Jensen, Finn Larson and Helle Thomsen; the email shows that the first two had been already met her on 27 August to give the statistics. They commented on what was asserted by the claimant’s lawyer, agreeing there were instructions from Vibeke Oliver and Ghita Sorensen for Ryanair, denying the others, and agreeing that the AdSense project came from head office, unless concerning the Olympics, which was on the UK budget. Finn Larsson reported that he had only been involved with the unsuccessful AdSense project (in 2011). Helle Thomsen, late in the process, filed a detailed account of the Marguerite project, saying it was under consideration when she joined, and the claimant had taken the lead with some very specific wishes as to what to do and when; it became a high priority project. At a half-yearly meeting the claimant had told her he would find some solutions for getting the route online, but he did not bring them back to her, instead informing her that they were to use Timgu, as they had worked with the office before, and could do it inexpensively. She then had the project description, and clarified some points with Alexander Kahn, not appreciating that this was finalised until as they left for Denmark the claimant told her at the security gates at Stansted that they were to go ahead with Timgu, and when she said she had not seen the prices, and did not know the price level, he had told her it was cheap and they wanted to start; it would be funded from extra money in her budget which he said was earmarked for Marguerite, and from his own. She had asserted he had already made the decision; he had replied that she will be the one to sign. She had not discussed it further because this was “one week before my probationary period ended”. Later during the Denmark tour she was told that he had instructed Timgu to go ahead. She had seen no quotations; in ongoing dialogue about the detail she had remained “neutral and hesitant”; a lot of the dialogue bypassed her altogether. Dismissal[53]On 30 September the respondent terminated the claimant’s employment by an eleven page letter, which responded to the lawyer’s arguments point by point. Did not agree that the claimant had had limited engagement with Timgu on these projects; to the contrary, the only head office initiation was in January 2011, (Foursquare) and came from the claimant’s personal intervention. Even where another office was involved, the work had come through the claimant. They disagreed that Marguerite was the only example of not getting other estimates first. There was no evidence of other estimates in any project from December 2010 to date, and as for Marguerite, Helle Thomsen had never been told of any alternative supplier’s figure, even verbally. He was offered sight of all accounts payments from Visit Denmark to Timgu. As for any dispute on the amounts involved, that did not relieve him from the leadership responsibility which had been abused when starting a partnership that did not follow the standard rules, and had involved “funnelling money to a company where there is a clear breach of trust (nepotism)”. In any case, Helle Thomsen’s detailed account showed that she had been ordered to sign the agreement so that he was not the “bearer”. As for the current leadership not finding out about the collaboration until the end of 2013, that was because only then did local staff inform them. He had never discussed collaboration with his son or engaged with them. Local offices selected suppliers, and head office went with that decision. There had been no reason to suspect impropriety until Jan Olsen was informed in the autumn of 2013 of the claimant’s link with Timgu, and staff unhappiness about their instruction. Jan Olsen recollected meeting the claimant’s family in 2012, but not that his son owned Timgu. The Marguerite project bonus was for the creative project idea, not for any work done by Timgu; in any case, as of 21 August, Jan Olsen did not know that Timgu was working on Marguerite. The information came to him because of the “whistleblower solution” Jan Olsen had established with the finance staff on 22 January. As soon as he was informed he had investigated and then called the meeting on 27 August. As for the unfortunate out-of-office message, it had been corrected quickly, only three internal employees got it; it had since been communicated that they were discussing a restructure of the London office. It was denied that age had anything to do with the decision. Any earlier discussion about retirement was initiated by the claimant in relation to his pension status. Overall, the board was worried that the claimant had supported the relationship between Visit Denmark and Timgu for several years without considering whether it was correct to use close family and to channel money to them, or whether his actions could put Visit Denmark in a bad light in Danish media. At a minimum, he should have asked the board for consent to continue the working relationship. He should have known this, given that he was marketing director in the local office, and a former leader of Wonderful Copenhagen, with many long lasting relationships to current employees there. He should have brought the close relationship between Timgu and Visit Denmark to an immediate stop. There was reference to a recent media storm in Denmark over Wonderful Copenhagen. (This is a reference to a publicly controversial budget overspend in the organisation’s budget for the Eurovision song contest in May 2014). There followed detailed arrangements for leaving with nine months’ notice, to be taken on garden leave (Fritstilet) at the request of his lawyer, but subject to mitigation were he able to obtain alternative employment during leave. Mitigation[54]Between November 2014 and January 2016 the claimant made eight applications for jobs in tourism, six of them in Norway and Denmark, as well as registering his CV with agencies. None resulted in any offer of employment. At the same time he and his wife started looking for a restaurant business to run in Malaga, without success. In February 2016 they started a restaurant in Denmark, renting for nine months, and then running an inn, so far at a loss. Later Discoveries[55]The discussion of the consultation process above sets out what was known to the respondent at the date of dismissal, namely the extent of Timgu’s work for Visit Denmark, whether senior managers knew about the family connection, whether other suppliers had been asked to quote, and whether the work came from the claimant, or independently within the organisation.[56]Following more detailed investigation after termination and the commencement of tribunal proceedings, the respondent concluded that the claimant was in breach of the term of his contract as to outside activities to a significant extent, given the depth and detail of his involvement in Timgu’s business, and has pleaded that as evidence of conduct tending to show that any compensation for unfair dismissal should be reduced.[57]On the claimant’s case, he had confined himself to fatherly advice to the start-up; he said: “I wasn’t very much involved in running Timgu”. In our finding the involvement went beyond that. Several of the invoices, starting from the three invoices of 13 December 2010, were prepared on the claimant’s office laptop kept at his home. The claimant said this was because his laptop was also used by Alexander Kahn. He attended a board meeting on 16 December 2010.[58]In January 2012 Alexander sent his father direct (not copying the marketing manager Vineke Oliver) details of his bank account so that the December 2011 invoices could be paid. This, and the meta data suggesting later creation of invoices than the stated date, tends to reinforce the impression that these large prepayments were tailored to Visit Denmark’s budget surplus, rather than any commercial assessment of anticipated invoices. (This is also the month when Alexander’s younger brother Jonathan was first employed by Timgu.) According to Alexander Kahn, after Timgu’s finance director left, his father worked on invoices for him from 2012 to 2014. In April 2012 company minutes showed that the claimant was to act as the unpaid chairman and visit the office once or twice a week. Challenged that this would intrude on his working time, the claimant said that he would do the meetings on the way to or from work, at 8 am and 5 pm. In June 2012, following the split from the Finnish partners, he is shown in an organisation chart as the company chairman; he was asked to advise on the first draft of the business plan. In August 2012 the claimant told Alexander that the marketing budget for Google had gone up; challenged that this was not something he would have told another supplier, the claimant disputed it but gave no examples. In September 2012 he declined an outlook calendar invitation to attend a Timgu board meeting, while at the same time emailing his son to say that he would be attending, and had only declined because “I need to get it out of my system”, indicating to us that he was aware that a meeting on another company’s business during his own working hours should fly under the company’s radar. In October 2012 wrote a stern letter to a creditor of Timgu, who was also a business partner of Visit Denmark, saying: “as you probably know, I am the chairman of Timgu” telling them to pay up, using his visit Denmark sign off as director, UK and Ireland. (Earlier emails show that the lead to this debtor was sent to Alexander by his father in 2010). In December 2012 the claimant gave Alexander detailed advice on his VAT returns. On 21 December 2012, tellingly, Alexander wrote his father: “I attach the two invoices, one for £2,000, one for £3,000, so take your pick” – he would not enter them officially into the accounts until he had decided which. In the event, the claimant did not take his pick, but paid both of them, and a third invoice for £1,000, so the total payment at the end of year was £6,000. In February 2013 he sent his son detailed advice on splitting off the Finnish elements of the company accounts, after being sent the accounts were sent to him direct by Timgu’s accountant. He seems to have helped out with Timgu’s cash flow difficulties in 2013. In October 2013 Alexander Kahn asked his father for a loan of 100,000 Danish kroner, in connection with a court case in Denmark, for repayment by May 2014. In November 2013 the claimant corresponded with Islington Council about Timgu’s business rates (there was a County Court summons for non-payment). In March 2014 Timgu repaid most of the loan. We also saw that in February 2014 the claimant forwarded to Alexander Kahn an internal PowerPoint about Visit Denmark’s Google AdWords marketing plan, saying it might be an idea to reach out to the new head office manager, adding that the attachment was “obviously confidential”. Challenged that he was breaching company confidentiality and knew that, the claimant agreed “it looks odd”. Also in 2014 the claimant gave Alexander Kahn very detailed advice about their employment practice.[59]In our finding this level of involvement well went well beyond fatherly advice to a start-up; even of it had been, we do not accept that all the help was outside working hours. Although it was suggested by the claimant’s solicitor that he worked flexitime and long hours, the only evidence we had of the claimant’s working time indicated he worked 9-5. In practice, if not in name, he performed the functions of company chairman, advising, often in detail on business organisation, accounts and business plan, suggesting leads, chasing debtors.[60]Further, the content of the advice included tip-offs about potential leads within Visit Denmark, and availability of budget, as well as the claimant’s promotion of Timgu. It demonstrates that the relationship between Visit Denmark’s London branch and Timgu was anything but arm’s-length. It is most unlikely the claimant would have performed these services for any other supplier, and there was no evidence to say otherwise. The letter he sent to the creditor on behalf of Timgu (saying he was chairman) clearly overstepped the line. Nor would any other supplier have been invited to submit additional invoices at the end of the year.[61]One further matter that the respondent later investigated and now represents as misconduct is the use of the claimant’s wife as a catering supplier. In our understanding she is a chef, but did not run a catering business. During 2012 she catered for a number of events for Visit Denmark, some of them relatively small, and most of them hospitality connected to the July 2012 Olympics. It appears that the claimant prepared the invoices for her; they were paid by the London offices Olympics marketing budget. He also lent his credit card to purchase catering equipment, and submitted an invoice for £2,000 consultancy fee, which is over and above the invoices submitted the particular events. No other caterer seems to have been contacted; it was suggested by the claimant, without detail, that Visit Denmark had been let down by an alternative caterer three weeks out. The respondent does not object to her catering particular events, and knew of it at the time, but it does object to the additional consultancy fee, which they view as another way of diverting Visit Denmark budget to the claimant’s family. We had no evidence from Mrs Kahn, and the evidence about the credit card damaged the suggestion that the £2,000 was to buy catering equipment.
Relevant Law
[62]The Equality Act 2010 at section 13 provides that “a person(a) (A) discriminates against another(b) (B) if, because of a protected characteristic, a treats be less favourably than a treats or would treat others”. Age is a protected characteristic.[63]The word ”because” requires the tribunal to examine the reason why an employer acted as he did, and whether the protected characteristic had ”a significant influence on the outcome” – Nagarajan v London Regional Transport (2001) AC 501.[64]Because people rarely admit to discriminating, may not intend to discriminate, and may not even be conscious that they are discriminating, the Equality Act provides a special burden of proof. Section 136 provides: “(2) If there are facts from which the court could decide, in the absence of any other explanation, that a person (A) contravened the provision concerned, the court must hold that the contravention occurred. (3) But subsection (2) does not apply if A shows that A did not contravene the provision.”[65]How this is to operate is discussed in Igen v Wong (2005) ICR 931. The burden of proof is on the claimant. Evidence of discrimination is unusual, and the tribunal can draw inferences from facts. If inferences tending to show discrimination can be drawn, it is for the respondent to prove that he did not discriminate, including that the treatment is “in no sense whatsoever” because of the protected characteristic. Tribunals are to bear in mind that many of the facts require to prove any explanation are in the hands of the respondent. Unfair Dismissal[66]Unfair dismissal is a statutory right. By section 98 of the Employment Rights Act 1996, it is for the employer to show that the reason for dismissal was a potentially fair reason. Section 98 (1) includes as potentially fair reason is a dismissal for conduct. An employer may also potentially dismiss fairly for: “some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held”.[67]If a potentially fair reason is shown, section 98 (4) provides that it is the employment tribunal to determine: “whether the dismissal is fair or unfair (having regard to the reason shown by the employer)—" (which)(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and(b) shall be determined in accordance with equity and the substantial merits of the case”.[68]In conduct dismissals tribunals have regard to British Home Stores v Burchell (1978) IR 379. We must consider whether the employer had a genuine belief that the employee was responsible for the misconduct, whether the employer had reasonable grounds on which to base that belief, and whether at the time the employer form that belief it had carried out as much investigation as is reasonable in all the circumstances. The tribunal was only take into account what was known to the employer at the time of dismissal – W. Devis & Son v Atkins (1977) AC 931. It must consider the facts known to the decision-maker, even if other facts were known within the organisation, but not within the group of people responsible for the investigation – Royal Mail Ltd v Jhuti (2019) UKSC 55. The tribunal must not substitute its own view for that of the employer, provided the employer’s action was within the range of responses of a reasonable employer, and this principle applies both to findings on whether the decision itself was reasonable, and on whether the process adopted was reasonable – Foley v Post Office (2000) IR LR 82, and Sainsbury’s Supermarkets Ltd v Hitt (2002) EWCA Civ 1588.[69]On procedure, where an employer makes a mistake about the law when deciding to dismiss, we should consider whether it is reasonable having regard to equity and the substantial merits of the case that the employee should bear the consequences of the employer getting the law wrong, even if the employer’s mistake was not unreasonable – Eversheds Legal Services Ltd v de Belin (2011) ICR 1137. It has been held that where an employer follows the procedure agreed with the unions, it is hard for an employee to establish that this was inadequate or failed to meet the standards of the ACAS code of practice – East Hertfordshire District Council v Boyton (1977) IRLR 347. In such cases tribunals must not forget that they have to decide whether the employer acted reasonably.[70]Where a dismissal is found unfair because of shortcomings in the process by which the decision was reached, when it comes to remedy, the tribunal can consider what difference a fair procedure would have made to the outcome – Polkey v AE Dayton Services Ltd (1988) AC 344.[71]As noted, the tribunal must decide whether the employer acted reasonably unreasonably in dismissing having regard to what that employer knew at the time. Where an employer discovers wrongdoing after the dismissal, there is provision for a tribunal to reduce the basic award by virtue of section 122 (2) of the Employment Rights Act. The conduct may not have contributed to dismissal, nor need the employer have known about it at the time, for the tribunal to exercise its discretion to reduce the award such that it will be just and equitable to do so.[72]There is also provision to reduce the compensatory award, by section 123 (6) of the Employment Rights Act where the tribunal finds that the dismissal “was to any extent caused or contributed to by any action of the complainant”. In such circumstances it must reduce it “by such proportion as it considers just and equitable”. When doing so it must consider four questions: what was the conduct said to be contributory fault; irrespective of the employer’s view, was that conduct blameworthy; did that blameworthy conduct cause or contribute to the dismissal; if yes, to what extent is it just and equitable to reduce the award - Steen v ASP Packaging Ltd (2014) ICR 56.[73]Finally, on compensation, where the employer has failed to follow the ACAS Code of Practiceo discipline and grievance, and the tribunal considers that failure unreasonable it may, if it is just and equitable, increase the compensation otherwise payable by up to 25% – section 207A Trade Union and Labour Relations (Consolidation) Act 1992. Discussion and conclusion - Reason for dismissal[74]The tribunal finds that the respondent’s reason for dismissal was a genuine belief that the claimant was guilty of misconduct both in using his son’s business as a supplier without referring the conflict of interest to the CEO or the board, and in defying the verbal instruction to stop using Timgu. Age Discrimination[75]We considered the extent to which this decision was influenced by the claimants age, given that sometimes employers will seize on some event as an excuse for what is at base a discriminatory decision. There is no named comparator. What facts have been shown?[76]The claimant was 61 at dismissal, and intended to retire at 65. The respondent had no plans for his succession in 2014, and he was not replaced until 2016, by a man aged 50.[77]Jan Olsen was five years younger than the claimant. At the time of dismissal the German country manager was two years older than the claimant, the head of IT Finn Larsson was a year older, as was the design manager for digital media, and the head office marketing manager. An employee in the Hamburg office was two years younger. The financial controller in New York was five years older than him.[78]Jan Olsen conceded that he would from time to time refer to people in their age group, including himself, as “digital immigrants”, a variation on the usual term “digital natives”, meaning people who grew up using IT, as against those who have had to learn these skills in adult life. He had never suggested that the claimant was at sea in the use of IT or online marketing. We note that at head office senior positions in IT are occupied by people in their 60s. There is no reason to believe Jan Olsen wanted to replace the claimant with someone younger.[79]The claimant relies on hostile remarks during the appraisals, indicating that he should retire. In the tribunal’s finding, it was the claimant himself who raised the retirement issue, as shown by emails he sent on 2 April 2012, and another on 5 April 2013, asking about his entitlement to a Danish pension, given his service overseas. Both met with positive and businesslike replies from HR. It cannot be said that merely mentioning retirement in the appraisal interview for one in his age group indicates discrimination. It is reasonable for an employer who understands that an individual is considering his retirement provision to enquire about his intentions, so as to consider succession where necessary. Significantly, it was not put to Mr Olsen that he had wanted the claimant to leave before 65, or displayed any hostility to the claimant in discussion of plans. We do not accept there was any hostility. The claimant has not proved any facts from which we could conclude age was the reason for dismissal.[80]We have concluded that the claimant’s age played no part whatsoever in the decision to dismiss him when the Marguerite project came to Mr Olsen’s attention in August 2014. The use of family without seeking authority, and defiance of the instruction, were the reason for dismissal. The age discrimination claim does not succeed. Discussion and Conclusion – Fairness of Dismissal[81]The process adopted did not meet English standards of fairness. The claimant did not see the documents or emails containing evidence against him, there was no hearing where he could put his case or submit contrary evidence, and there was no appeal.[82]As well as that, the timetable set out in the consultation letter indicates a decision had already been made unless he could persuade them otherwise, and that he would not be heard (or read) with an open mind. The out of office suggests that the staff member asked to set it had been led to believe the decision was final – after all this is what senior managers were being told - even if Mr Olsen intended something more nuanced for public consumption at that stage. Further, whatever the intention, the effect was to burn their boats.[83]Evidently the respondent acted under a Danish statutory procedure, inviting comment before making a decision. We do not know if the statute includes giving the employee documents, but the letter was very full, and it seemed to us that they did treat the employee response seriously and investigated conscientiously.[84]Why was the Danish procedure used, when in fact the respondent’s London handbook contained what would be considered a fair procedure in England? The point was not explored, so we do not know if this was oversight – Copenhagen HR and legal advisers did not know about it – or by intention, having regard to the respondent’s view on sovereign immunity. Nor do we know why the claimant did not protest. As the senior person in London he might have known about it. Probably he instructed a Danish lawyer, given the respondent’s statement stated reliance on the Public Administration Act procedure, who could not have known of English employment law, with the result that both sides saw the termination consultation process through the prism of Danish law.[85]We are invited by the respondent to find that a mistake as to applicable law (de Belin) did not render the dismissal unfair, viewed as a whole, alternatively, that they used an established procedure (Boyton) and it would have been too difficult to discard it and use another. The latter argument does not deal with the problem that they did have an established (and fair) procedure in the handbook, but whether by accident or design chose not to use it. The former argument is more attractive, given that there may have been a mistake of law as to whether the Danish procedure applied, given the contract term as to Danish law, and the fact that state immunity was believed to apply. (In September 2014 the EAT decision in Benkharbouche had been given a year before, and the Court of Appeal judgment was February 2015, though there is no reason to think the respondent was aware of either.) The Danish procedure allows some opportunity to the employee to challenge the case against him, though without access to evidence or the opportunity of appeal, and although a hearing was offered, for some reason it did not happen. In de Belin, the employer’s mistake concerned how to treat equally in the redundancy selection process the comparator employee who was on maternity leave, here the mistake is harder to understand when the reason for not using their own London procedure is unknown. Viewed in the round, it was not fair to dismiss an employee without access to the evidence, only a statement of it, without a hearing, and without any appeal. The respondent suggested the claimant could have sought judicial review in Denmark, but there is no reason to hold that this would address the substance of the decision when as far as is known the process followed Danish procedure. The mistake was also of a different character. It is not asserted that the Danish process was deliberately chosen in preference to the London handbook procedure. It may simply have been overlooked by both sides, and the claimant might be excused from noticing when he was working to a tight timetable and no longer had access to the respondent’s systems and materials, while the respondent did have that access.[86]We conclude the dismissal was unfair in the process adopted. We do however find that the respondent carried out a conscientious investigation both initially and to examine the claimant’s did not dislodge their belief in misconduct. Indeed the claimant’s insistence that the respondent had known of the link with Timgu for some years suggested he accepted approval was needed, and reinforced their belief that his judgment was unsound.[87]We also hold that dismissal for such conduct was within the range of reasonable responses. The claimant and Jan Olsen shared a common culture in Danish public employment. There was a clear rule that potential conflicts of interest of the employee and his family with the respondent’s interest must be referred elsewhere. The claimant’s: “I thought we were more private than that”, indicated to us he knew the rule. A more junior employee might have been given a reprimand and a warning. The claimant however was in charge, he had leaned on his staff to accept the arrangement, and his response to the accusation was to suggest that Timgu was a generally accepted supplier, when all the evidence – which they had investigated and – showed that this was untrue, and that Timgu was only used because introduced and promoted by the claimant. He should have known better, and his evasive response confirmed that. This was quite apart from not heeding the specific instruction six months earlier to stop using them.
Remedy
[88]Having found the dismissal unfair for want of process, we consider what difference it would have made had the respondent followed its London process. In our view the outcome of a fair process would have been the same. The claimant has now had full disclosure of documents and sight of the respondent’s evidence. He has had a fuller hearing before this tribunal than might have taken place under procedure. Having heard all the evidence on the matters he was dismissed for, we anticipate a reasonable employer hearing his case following disclosure of the evidence , and hearing any appeal, would have concluded(1) that he did know that he should not have used Timgu as a supplier without explicit permission as there was a conflict of interest,(2) that he did not seek permission to send them work, only to offer his son advice on setting up his business,(3) that he knew that almost all work for Timgu (Adsense aside, which ended without credit to Timgu) originated through him, and that at least from 2011 work was not sent to Timgu other than through the claimant, whatever name was on the paperwork, or whatever impression he tried to create that work came from head office and other branches independently of the claimant. Most employers would have viewed very seriously the by-passing of the staff supposed to be originating the supply of work (as Helle Thomsen was) as an abuse of their power and independence of effective oversight, and any reasonable employer could have dismissed him for disobeying without excuse an earlier instruction to stop using them. It might be argued that by giving the claimant notice the respondent indicated that his conduct was not serious – the contract provided for summary dismissal – but the respondent’s explanation was that the board recognised his long and otherwise satisfactory service, while no longer feeling able to employ him in a position of trust.[89]Had there been a fair process, in our finding that would have delayed the dismissal by at most a month. We can see that the respondent could and did act swiftly when presented with material to investigate and when they had a decision to make. They would have held a hearing within the consultation period, investigated when they did, and if they had already used all available personnel from the board, could have found an independent person to hear an appeal – someone from the embassy perhaps, or a Danish professional living in London or Copenhagen. Reduction of Awards?[90]We turn to consider the respondent’s argument that the basic or compensatory award should be reduced. Compensatory Award[91]In relation to the matter for which the claimant was dismissed, and whether any conduct contributed to the dismissal, we consider whether the claimant knew what he was doing was wrong, and whether, given the claimant’s assertion that the respondent already knew Timgu was a supplier connected him, he could conclude from their behaviour that he was doing nothing wrong.[92]As noted, there is some doubt that the Danish Public Administration Act was referenced in the contract documents, and it is not mentioned in the wide-ranging handbook. There is a modern practice of spelling out every principle and misdemeanour in a code, policy or mission statement which in conflict of interest matters has intensified with American legislation on bribery and its very long reach, but that does not mean employees need only beware of what is written down. In our finding, anyone who works for a company they do not own, in the private sector as much as when publicly funded, knows that they must be faithful and fair and not use the company as an opportunity for their own financial advantage. They should also be aware that their judgment may be impaired when there is a potential conflict and should not themselves be the judges of what is proper. It is not necessary to tell employees they should not put their hands in the till, or favour their families, in order to dismiss them (fairly) for doing that. These are implied terms. Explicit codes are only needed if there is an unusual feature (the seriousness of breaching a smoking ban in a munitions factory for example) or the employer has decided no longer to tolerate behavior previously tolerated. We add that the fact that his own staff were unhappy about it shows that even if they could not have cited the Act, they knew what he was doing was wrong.[93]Apart from this, the claimant had worked in Danish public service before the 2010 Act, and will have known of the need to report and step aside if his family interest was concerned. He no reason to believe the position was otherwise after 2010, and if he was in doubt he did not try to check. In our finding he did know he should have reported the use of Timgu for paid work, and that seeking permission for fatherly advice did not cover instructing them to work for Visit Denmark, let alone favouring them with prepayments. His attempt to create the (false) impression that Timgu was an existing and recognised supplier used across the organisation independently of London shows he knew he had to disguise his role as their promoter. He was not able to show that competing quotes had been obtained, as would have occurred with any other supplier. It may be the case that Timgu were cheaper than competitors, and it is not shown they did not earn all the money (the point has not been investigated), but he was not dismissed for that, but for breaking the rules, favouring his family, and concealing the position. He has not explained why he should seek permission to advise his son, but not seek permission to give them work. He also knew there was public scrutiny of the use of public funds, both from the 2009 affair (even though before the Visit Denmark Act) and from the more recent outcry about the use of funds by Wonderful Copenhagen, of which he must have been aware as a former employee, and that this could damage the respondent’s reputation.[94]Of the claimant’s argument that it was “obvious” that he was connected with Timgu, so removing the need for Executive Board approval, there is no good reason for thinking anyone outside London knew of the connection, while his own staff disapproved, but kept their heads down. (Our reading of Jan Olsen being informed late in 2013, and the claimant not making an end of year prepayment at that time is that Vibeke Oliver objected, such that only when she had left did he involve Timgu again). The claimant relied on the 2012 meeting of Jan Olsen and Alexander Kahn. In our finding this is flimsy cover. There is no reason why a CEO on a meet and greet should know that this was a paid supplier, or remember the name of the son’s business. It was also suggested that any impropriety would have been picked up on audit. Our understanding is that auditors sample invoices for a deeper look. The invoices may never have been sampled. If they had, not all had the claimant’s name on them, even where in practice he had instigated the use of Timgu. We concluded the claimant had been lulled by the passage of time into confusing what was wrong with what he could get away with, and at best had persuaded himself the practice was permitted because it had lasted more than three years. We do not however accept that he genuinely believed there was nothing wrong with what he was doing.[95]The other element of conduct we need to consider is abuse of his position as London Manager to get his staff’s name on the invoices from time to time, to pressure Helle Thomsen to take a done deal, and more generally to set a very bad example to his staff of proper standards when a leader should lead by example.[96]We conclude that the conduct was serious, given his seniority, and blameworthy. It also caused and contributed to the dismissal. There was no other cause. It might be said that the respondent relied heavily in disobedience to the instruction, but we find that the instruction was issued on discovery of and in response to the claimant’s existing poor conduct; he was lucky to be given the benefit of the doubt by a private conversation and the prospect of a clean slate if he stopped using Timgu. In many organisations there would have been disciplinary proceedings at that point. We concluded that it is just and equitable to reduce the compensatory award (one month’s pay) by 100%. Basic Award[97]On the basic award, which would otherwise be 22.5 weeks pay, we can take account of later discovered conduct. What has been uncovered after dismissal is a serious and prolonged breach of the requirement not to be engaged in other business, and even more seriously, the active role taken by the claimant in a business his employer used, in a way that gave them a financial advantage. It is natural for parents to want to help their children, but he used his position to help in a way which he must have known his employer would not have countenanced. His prepayments of substantial sums (compared to the value of most invoices) gave his son significant and no-cost help with cash flow, always the most difficult problem for a start-up. He tipped them off on leads and budgets. He used his position in Visit Denmark to prevail on a creditor for them. There was clear collusion in the creation of invoices, and he decided to pay sums without regard, it seems, to what work they were for and what that work amounted to. The consultancy fee for his wife was opportunistic, not a charge she would have made without his knowledge there was a bit more in his budget.[98]What the respondent had discovered at dismissal was but the tip of the iceberg. In our finding the claimant’s use of his position to assist his family’s interests was dishonest, and he knew it should be concealed. In deciding to what extent the basic award should be reduced we also took into account the fact that he had some opportunity in the procedure adopted to put his case, and have it investigated, and secondly, that he was given the benefit of the doubt in view of long service and paid a full nine months’ notice, which we doubt would have been paid if the board had known the full story. Taking these factors into account we concluded that this was one of the unusual cases where it is just and equitable to reduce the basic award by 100%.