Ms M Goodsell v Mrs D Barclay-Bernard and Mrs N Hiller T/a Ellenwhorne Equestrian Centre: 2301915/2018
EMPLOYMENT TRIBUNALS
Case No 2301915/2018
Between
Ms M GoodsellClaimantMrs D Barclay-Bernard and Mrs N Hiller T/a Ellenwhorne Equestrian CentreRespondent
Before
Employment Judge R F PowellMr Foster (instructed by solicitor) for claimantDate 29 June 2023
JUDGMENT
The Judgment of the Employment Tribunal is: The breach of contract claim is within the Employment Tribunal’s jurisdiction
REASONS
Conclusions
[1]In February 2021 I commenced hearing this case which relates to the relatively short service of the Claimant as an apprentice of the respondent. The essence of her claim was that she had been dismissed and, because she lacked sufficient service to bring a claim of unfair dismissal, she made a number of monetary claims, one of which was a claim under article 3 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994.[2]At the outset of that hearing Mr Hoyle indicated that there was an issue of jurisdiction which he considered novel, and which he could not fully articulate.[3]As it was an issue of jurisdiction, which if it had merit would mean any final decision I reached would be ultra vires, I agreed with the parties that I would hear the evidence and make the relevant findings of fact and allow Mr Hoyle time to set out his fully formed argument in writing.[4]Directions were given for the service of arguments and authorities with which the parties duly complied. Unfortunately, those submissions did not reach me for a considerable time and, following a short preliminary hearing on 17th January 2022, I agreed to determine this issue on the parties’ written submissions and provide a written judgment.[5]Before turning to the parties’ submissions, I will set out my consideration of the statutory framework and a little of the factual matrix; which is relevant to the issue before me.[6]The Employment Tribunal is a “creature of statute”. Its jurisdiction is defined by statute and statutory instrument.[7]Within the scope of the many acts of parliament which prescribe the types of claim that fall within the employment tribunal’s jurisdiction are further limitations of its jurisdiction often referrable to a characteristic of the Claimant; as a worker or an employee, their length of continuous service, the territorial scope of the employment tribunal or the state immunity of the respondent.
Findings of Fact
[8]The Claimant, on my findings of fact, entered in to a contract of employment with the Respondents which was recorded in an agreement titled Apprenticeship Agreement and was signed and dated 22nd May 2017.[9]The agreement stated that its terms, along with the content of the staff handbook, formed the contract of employment between the parties and the agreement was the statement of the Claimant’s principal terms. An extract from the respondent’s handbook was contained in the bundle of documents presented at the original hearing (see page 74c onwards). The Respondents accepted that the Claimant was an employee (paragraph 17 of the grounds of resistance).[10]The Claimant, on my findings of fact, was dismissed by the Respondents without notice.[11]The Claimant presented a claim for wrongful dismissal; that, in breach of her contract, the respondent failed to pay her contractual notice.[12]Such a claim falls within the scope of section 3(2) of the Employment Tribunals Act and Article 3 of the Extension of Jurisdiction order cited above.[13]On the face of the Claimant’s pleading, it is a claim which arose, or was outstanding, on the employee’s termination and she has sought damages for a breach of her contract of employment, or any other contract connected her employment.[14]The Claimant seeks compensation for the duration of her apprenticeship. I have not yet seen the complete terms of her contract of employment but I note the following:a. On the Apprenticeship Agreement no termination date is recorded.b. On a document entitled Learner initial Interview the employers have stated that the apprenticeship would terminate on 19th June 2019.[15]Based on the above she seeks a sum equivalent to her apprentice pay for the seventy one weeks between the date of her dismissal the date one which, as she asserts, her contract was to end, and other associated losses. The Jurisdiction Issue The Respondents’ argument on jurisdiction[16]Mr Hoyle’s argument, after two introductory paragraphs, set out a history of the transition of the established characteristics of a traditional deed of apprenticeship to the “modern apprenticeship” agreement, in its various iterations.[17]The respondents argue that the statutes and regulations provide for terms of apprenticeship which do not entail a fixed term contract and allow for a lawful termination in accordance with Part X of the Employment Rights Act 1996, in particular section 86.[18]Having read the respondents’ references to the statues and regulations, I accept that the respondent’s summary of the relevant statutory materials is correct.[19]The material purpose of the respondents is set out in paragraph 14 of its argument; “The Respondent’s position is that the Claimant was engaged under an apprenticeship agreement under ASCLA 2009 and does not benefit to damages on early termination of apprenticeship.”[20]Paragraph 18 asserts that the Claimant’s application for her loss of income up to the expected date on which her apprenticeship was to conclude is misguided; because the character of her contract was not equivalent to that of a deed of apprenticeship. This, I note, is an issue which I have yet to address.[21]The Respondents’ written argument concludes with an assertion that the employment tribunal does not have jurisdiction to hear a claim for “future loss”. The basis for that argument is that, on the respondents’ construction of the terms of the contract between the parties, the Claimant was only entitled to one week’s notice.[22]The entire force of the respondent’s argument is that Claimant has no realistic hope of an award of compensation for her loss of her pay up to June 2019.[23]The Claimant’s argument’s I will note with brevity; the application is misconceived, without merit and advanced unreasonably. Discussion &
Conclusion
[24]I note that the Respondents do not argue that the breach of contract claim was out with the Employment Tribunal’s jurisdiction.[25]It is also notable that the Respondents’ argument makes no reference to the Extension of Jurisdiction order.[26]There is no point put forward in the Respondents’ argument which asserts that a claim for breach of contract is not within the Employment Tribunal’s jurisdiction. There is no argument that the claim before me falls out with Article 3 of the Extension of Jurisdiction order.[27]On the face of the Respondents’ argument (which does not address notice periods set out in the Claimant’s Apprenticeship Agreement) there is no suggestion that the Claimant could not maintain a claim damages for the period of one week.[28]I have taken sometime to consider Article (3)(3) and find no evidence that the claim before me falls within any of the exemptions. Conclusion[29]The whole of the Respondent’s submission is an assertion that the claim for seventy one week’s loss of income has no reasonable prospect of success.[30]In my judgment the respondent’s submission is not an argument on jurisdiction, it is an argument on quantum.[31]The Respondents could have made an application to strike out this aspect of the claim, they did not. In any event, as I have not yet been provided with all the documentation which forms the Claimant’s contract of employment, had such an application been made, I would not have upheld it at this juncture.[32]Whilst the Respondents can deploy all of their arguments on the issue of quantum during the resumed hearing in June 2022, their application on jurisdiction fails.[33]For the above reasons the application is dismissed.[34]Conduct is vexatious "if an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive" (ET Marler Ltd v Robertson [1974] ICR 72).[35]With regard to unreasonable conduct it is necessary for the Tribunal to consider; “the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the Claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had." (Barnsley Metropolitan Borough Council v Yerrakalva [2012] IRLR 78).[36]It should be noted that merely because a party has been found to have acted vexatiously, abusively, disruptively or unreasonably or where a claim or response has no reasonable prospect of succeeding, it does not automatically follow that an Order for costs should be made.[37]Accordingly it is apparent that there is a duty upon the Tribunal to consider making a costs order where one of the circumstances set out above has arisen, but then there is discretion whether to do so or not.[38]As is well known, there is no general principle in the Employment Tribunal that costs follow the event, in other words that the losing party should pay the winning party’s costs. In fact the approach has been that the making of a costs order should be exceptional see Gee v Shell UK Ltd. [2003] IRLR 82. All depends on the exercise of the tribunal’s discretion.[39]Once relevant conduct has been found, a Tribunal must then go on to consider whether an Order should be made and, particularly, whether it is appropriate to make one.[40]When deciding whether an Order should be made at all and, if so, in what terms, a Tribunal is required to take all relevant mitigating factors into account.[41]With the above in mind I turn to the two applications made by the claimant. The Respondent’s Amendment Application[42]At the outset of the February 2021 hearing, some time was taken in addressing the respondents’ proposed amendment to their Response and, in particular, trying to identify the nature of the jurisdictional argument they made. With hindsight, it has become apparent why it could not easily be understood at that time. Time was also occupied with the claimant’s objection and her criticism of the respondent’s delay in raising a matter of jurisdiction in February 2021; in respect of a claim that had been presented to the employment tribunal in May 2018.[43]At the heart of the claimant’s submission is my finding that the respondents’ “jurisdiction” argument was not concerned with jurisdiction at all; it was an argument on the quantum of loss. Had that been articulated in the February 2021 liability hearing the process of restricting the liability hearing to “fact finding” would not have occurred, nor would the subsequent steps which lead to the judgment on jurisdiction of March 2022[44]Mr Hoyle is correct that I gave the argument some credence and I made the subsequent directions to enable the determination of the respondents’ jurisdictional argument. However, my decision was based on a degree of confidence that a professional employment law practitioner’s assertion was correct, insofar as it was asserted as a matter which went to the employment tribunal’s jurisdiction to determine the claim before it.[45]With regard to unreasonable conduct it is necessary for the Tribunal to consider: “the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the Claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had." Barnsley Metropolitan Borough Council v Yerrakalva [2012] IRLR 78).[46]It should be noted that merely because a party has been found to have acted vexatiously, abusively, disruptively or unreasonably or where a claim or response has no reasonable prospect of succeeding, it does not automatically follow that an Order for costs should be made.[47]Once such conduct or issue has been found, a Tribunal must then go on to consider whether an Order should be made and, particularly, whether it is appropriate to make one.[48]In my March 2022 judgment I concluded that the respondents’ argument did not articulate, nor even assert, a want of jurisdiction; it was an argument that the claimant’s quantum of loss arising from dismissal was nothing or negligible. It was an argument on one aspect of the claimant’s remedy.[49]I find that it was unreasonable to assert an argument on an aspect of quantum of loss amounted to want of jurisdiction to determine the whole claim for breach of contract .[50]That is particularly so when the respondents’ have had the benefit of expert employment law advice, from two different advisors, since July 2018 and pleaded jurisdictional points in their ET3.[51]The consequences of that unreasonable conduct was the loss of about 40 minutes hearing time in February 2021 and the cost to which the claimant was put in addressing the jurisdiction issue up to the receipt ,and reading of , the March 2022 Judgment. Is it just and equitable to consider making a cost order in this case?[52]I take into account that the respondents were legally advised and so I presume, in the absence of any submission to the contrary, they were advised on this issue, and understood the merits of the argument which they instructed Mr Hoyle to present.[53]I find that the consequence of the respondents’ unreasonable conduct was a considerable amount of additional legal costs which the claimant incurred.[54]I therefore find that it is just and equitable to afford the claimant redress for this unreasonable conduct of the respondents.[55]The Respondents own and run an established equine business with a house, additional buildings and a substantial parcel of land. On her evidence in February 2021, Mrs Hillier was in receipt of a wage from employment.[56]On the information before me there is no reason to consider that an award, the sum of which has yet to be determined, could not be paid to redress the expense the claimant has incurred consequent to this aspect of the respondents’ unreasonable conduct.[57]I have therefore concluded that a costs order will be made against the respondents with respect to their unreasonable assertion of a jurisdiction issue.[58]I have considered the claimant’s cost schedule but it is not possible to deduce which items are costs incurred as a consequence of respondents’ jurisdiction argument or what part of the costs incurred in making this application are attributable to this aspect of the respondents’ conduct.[59]Accordingly, I have made directions in respect of the above. The Conduct of Mrs Barclay- Barnard[60]The principle dispute between the parties was whether Mrs Barclay-Barnard had lied in her evidence before the tribunal and, given the claimant seeks her costs from the date on which she issued the ET1, whether the respondents unreasonably denied the dismissal of the claimant in the ET3.[61]The respondent referred to the guidance in HCA International Limited v JL May-Bheemul UKEAT/0477/10/ZT, in which Cox J said, at paragraph 39: “...a lie on its own will not necessarily be sufficient to found an award of costs. It will always be necessary for the Tribunal to examine the context and to look at the nature, gravity and effect of the lie in determining the unreasonableness of the alleged conduct.”[62]The respondent also referred to the guidance found in Kapoor v The Governing Body of Barnhill Community High School [2013] UKEAT/0352 where it is made clear that a finding that a party lied is not sufficient to find unreasonable conduct; there must be a factual exploration of the importance of that untruth to the particular proceedings.[63]The Court of Appeal decision in Yerrakalva v Barnsley MBC [2012] ICR 420, in which the main Judgment was given by Mummery LJ, at paragraphs 39-41 he said: “39. I begin with some words of caution, first about the citation and value of authorities on costs questions and, secondly, about the dangers of adopting an over-analytical approach to the exercise of a broad discretion.40. The actual words of Rule 40 are clear enough to be applied without the need to add layers of interpretation, which may themselves be open to differing interpretations. Unfortunately, the leading judgment in McPherson [McPherson v BNP Paribas (London Branch)] delivered by me has created some confusion in the ET, EAT and in this court. I say ‘unfortunately’ because it was never my intention to re-write the rule, or to add a gloss to it, either by disregarding questions of causation or by requiring the ET to dissect a case in detail and compartmentalise the relevant conduct under separate headings, such as ‘nature’ ‘gravity’ and ‘effect.’ Perhaps I should have said less and simply kept to the actual words of the rule.41. The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had. The main thrust of the passages cited…from my judgment in McPherson was to reject as erroneous the submission to the court that, in deciding whether to make a costs order, the ET had to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. In rejecting that submission, I had no intention of giving birth to erroneous notions, such as that causation was irrelevant or that the circumstances had to be separated into sections and each section to be analysed separately so as to lose sight of the totality of the relevant circumstances.”[64]The issue that Mummery LJ was addressing was to distinguish between the principle of relevance, which means that the Tribunal must have regard to the nature, gravity and effect as factors relevant to the exercise of its discretion, from a requirement that the Respondent had to prove that specific unreasonable conduct by the Applicant caused particular costs to be incurred. The former is necessary the latter is not.[65]The respondents correctly identified that I did not expressly state that Ms Barclay-Barnard had lied in her evidence. That, of itself would not be a determinative submission, where such a conclusion is the natural reading of the findings of fact: Daleside Nursing Home Ltd v Mathew UKEAT/0519/08, [2009] All ER (D) 99.[66]Further in cases where a tribunal expresses a conclusion that a witness did not lie, that does not exclude a finding of unreasonable conduct in the proceedings: Topic v Hollyland Pitta Bakery UKEAT/0523/11, [2012] All ER (D) 250. “[27] What emerges, in our judgment, from the authorities to which we were taken is this: first that the fact that a Claimant has based his or her claim on lies does not lead automatically to a finding either that the proceedings have been conducted unreasonably or that they have been commenced and conducted on the basis that they were misconceived; secondly, the fact that there have been no lies, equally, does not mean that there cannot be a finding that the proceedings have been brought or conducted unreasonably or as misconceived; and thirdly, it is a question in each case for the tribunal, in making their findings within r 40(3) of Sch 1 to the 2004 Rules and in exercising their discretion, if they have found as a matter of fact that there has been unreasonableness in conducting the proceedings or that the bringing or conducting of the proceedings has been misconceived, to look at the whole picture, bearing in mind that costs are rarely awarded in the Employment Tribunal and that the ordinary common law principles under the CPR do not apply.”
Conclusions
[67]The question that I have to determine is whether Mr Barclay- Barnard’s untrue assertion (that the claimant resigned) was unreasonable?[68]At the liability hearing, and in my consideration of this application,n I have taken into account the comments of Mr Justice Leggat in Gestmin SGPS S.A. v Credit Suisse (UK) Limited (2) Credit Suisse Securities (Europe) Limited, High Court 2013. His comments were in the context of a commercial trial, and although now adopted as guidance in one part of the Civil Procedure Rules, they are not in any sense a direction for employment tribunals. At paragraph 15 of his judgment he stated: “15. An obvious difficulty which affects allegations and oral evidence based on recollection of events which occurred several years ago is the unreliability of human memory. While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people's memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose:(1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and(2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate. 16. Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called 'flashbulb' memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description 'flashbulb' memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness's memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory).”[69]I take into account the fallibilities of the human memory in the context of the fact that, in July 2018, five months after the dismissal, the Respondents were able to articulate the view that the claimant had resigned and to deny dismissal.[70]I also take into account that, on the witnesses’ evidence and my findings, the parties were in an emotionally charged state and the dismissal was neither planned nor well considered or documented soon after the event.
Conclusions
[71]Mrs Barclay-Barnards evidence that the claimant resigned was not, in my judgment, true.[72]The consequence of her statement was the respondents’ denial of a breach of contract, by reason of Mrs Barclay-Bernard’s dismissal of the claimant. That in turn lead to contested proceedings on liability, effectively up to the 24th February 2021. In that period the claimant incurred considerable legal costs to establish that the respondent’s denial of her dismissal was untrue.[73]This was not a case where, on the evidence, there was any credible scope for confusion; one party asserted an express, and unambiguous, statement of dismissal, the other; an express and unambiguous resignation.[74]Mrs Barclay Bernard did not indicate she had any difficult in her recollection, or was otherwise uncertain of what she had said to the claimant.[75]The fact that I did express a finding of Mrs Barclay-Bernard’s motivation for her untrue statement of fact, does not, of itself, make the untrue statement reasonable.[76]Taking into account all of the above, in my judgment the conduct of the respondents, through Mrs Barclay-Barnard’s untrue denial of a dismissal, was unreasonable conduct. Should a costs award be ordered.[77]As I have noted ,above, the consequence of the respondents’ unreasonable behaviour was the denial of the breach of contract. The denial of that breach amounted to a denial of liability for those claims which stemmed from the dismissal and necessitated the liability hearing in February 2021 for which a substantial number of witness statements were served.[78]The presence of unreasonable conduct does not of itself justify an award of costs; the effect of the unreasonable conduct must have a had a sufficient effect upon the proceedings to warrant the exercise of the tribunal’s discretion in favour of the receiving party and the mitigating circumstances of the potential paying party must also being weighed. I have noted the potential mitigating circumstances which I have identified.[79]Had the breach been admitted, as some of the smaller claims were, it is more likely than not that the claim would have been resolved at a one day in 2021.[80]I also remind myself that cost awards are, and should remain, the exception in employment tribunal proceedings.[81]Having set out all of the material factors present in this case; in my judgment it is in the interests of justice to make an award of costs in respect of the unreasonable conduct of the respondent’s untrue denial of their dismissal of the claimant.[82]Accordingly, unless the parties reach a settlement a further hearing will take place to determine that amount of the costs to be paid. A separate directions order will be sent to the parties.[83]The last element in dispute is the cost the claimant has incurred funding the training and examinations needed to qualify as an accredited horse riding instructor through the British Horse Society.[84]I accept that, for the claimant, the principle benefit of the respondents’ apprenticeship was the opportunity to obtain this qualification. I accept that the claimant made reasonable efforts to find an apprenticeship which provided the same opportunity to obtain the above qualification and could not do so.[85]I accept that, as a consequence of the respondents’ breach of contract the claimant has continued her training and that such training has been privately funded; an expense for which the claimant seeks an award of damages.[86]In the course of discussion with the parties representatives after giving judgment on the primary aspects of remedy I raised the parties, and particularly with the claimant, whether Miss Goodsell had paid for the training costs herself, or whether another person had done so. if it was the latter in any part, whether Ms Goodsell was responsible reimbursing the third party contribution.[87]Mr Foster took instructions and stated that Ms Goodsell had paid a large part of the training fees herself and her parents had supported her to some degree but she was responsible for repaying them.[88]I allowed an adjournment for Mr Hoyle to see a document which set out the chronology of the relevant training and examinations undertaken (or yet to be undertaken)by the claimant I asked whether or not responded disputed the truth of Ms Goodsell’s position on this point. Mr Hoyle stated the claimant’s assertions were not accepted[89]I allowed Mr Hoyle to cross examine the claimant a second time, but as he had already completed his questioning on the subject of remedy earlier, I directed that the scope of his cross examination was limited to the truthfulness or reliability of Ms Goodsell’s assertion that she had paid the training and qualifications herself albeit with the benefit of her parents.[90]I intervened in the cross examination when Mr Hoyle was cross examining the claimant about a pony club qualification 2 years before the claimant commenced employment with the respondent and directed that questions were limited to the subject that I had set out beforehand.[91]At the conclusion of Mr Hoyle’s cross examination, during which there was no challenge to the honesty of Miss Goodsell's evidence, the respondents sought disclosure of the following: records of transactions from the bank accounts of the claimant and her parents and any other document which evidenced the payment of fees for lessons, examination fees or an agreement by Ms Goodsell to repay amounts paid by her parents.[92]These requests would have entailed searching and collating documents from a number of sources, probable partial reductions of irrelevant transactions then copying and sending to the respondents and Mr Hoyle. It would further require time for both parties to give instructions and receive advice. All of which would likely lead to additional costs to the parties.[93]This application was made at lunch time on the second day of the remedy hearing and there was no prospect that such an application, if granted, could be addressed in the remaining time.[94]The application was opposed by Mr Foster on the following grounds; the respondent had received the claimant’s schedule of loss in 2019 and had a very long time to consider the schedule and prepare its challenges, The case would inevitably be adjourned to another date; which on consideration of the history of this case, would probably lead to months of delay. There would be further costs to which his client would be put to answer an enquiry which was speculative at best. The delay, the cost and the speculative character of the request were cumulatively contrary to the interests of justice and the tribunal’s overriding objective.[95]I take into account the overriding objective, the interests of justice and proportionality. I also take into account the degree to which this is an application that is made in untimely fashion.[96]I note that the respondent has not accused the claimant of lying in the course of two periods of cross examination during this remedy hearing.[97]I take into account that granting this request will prevent the parties concluding their part in this hearing and that I have yet to hear, and consider ,a substantial costs application against the respondents.[98]Given that the last substantive hearing in this case was conducted in February , a further delay, inevitably counted in months could lead to this case, which began in 2018, being re convened in several months’ time.[99]I lastly note that Mr Hole’s explanation for the timing of his application; it was an issue which he had not considered until I raised it with the parties. I accept that is true.[100]Whilst I have had conduct of this case since the February 2021 liability hearing, I first considered the schedule of loss yesterday. The point I raised is neither novel nor complex. In my judgment it is a matter which a professionally represented party, and particularly one that has had the schedule of loss for about two years, should have considered before the l afternoon of the last day of the hearing.[101]I have taken into account the possible prejudice to the respondents. I also take into account the respondents did not, in the second cross examination, put to the claimant that she was misleading the tribunal in her answers.[102]In my judgment, this a somewhat speculative application and the reason for the timing of the application is far from satisfactory. The further delay and the additional costs to the parties also weigh against allowing the application. In this case the balance of justice weights against putting the claimant to further cost and delay because the respondents were not sufficiently prepared to deal with an issue, despite having a fulsome opportunity to scrutinise the schedule of loss before the commencement of this two day remedy hearing.[103]For these reasons the application for an order of disclosure is refused.[104]Having heard the claimant’s evidence I have concluded that the claim for the training and examination costs are well founded. There was no evidence to warrant a conclusion that the claimant could have found an alternative, and less costly, method of achieving the qualification and ,as I have noted, the opportunity to obtain the qualification was the principal benefit of undertaking the apprenticeship with the respondents. I find that the claimant had made reasonable efforts to obtain an alternative, and equivalent apprenticeship. In those circumstances her only practical option was to pay privately for that which the respondent’s no longer provided after their decision to dismiss the claimant. The Application under section 207A Trade Union and Labour Relations (Consolidation) Act[105]The claimant seeks, and the respondents oppose, an uplift on the damages awarded arising from the elements of the breach of contract relating to the claimant’s dismissal.[106]It is not in dispute that breach of contract claims brought under the provision of the 1994 Extension of Jurisdiction Order for England Wales is a class of claim which is set out within schedule 2A of TULR(C)A 1992.[107]It is not disputed that a breach of contract claim can fall within the ambit of section 207A or that it does so in this case[108]The respondent does dispute there is any relevant ACAS code of practice which applies to this case. The claimant asserts that, as I have found, the claimant was dismissed, and that dismissal was in breach of her contract. The claimant argues that a dismissal is an act to which the ACAS code on Discipline and Grievance applies. The respondent disputes the code applies to this case.[109]The statute states as follows (emphasis added): Effect of failure to comply with Code: adjustment of awards (1)This section applies to proceedings before an employment tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule A2. (2)If, in the case of proceedings to which this section applies, it appears to the employment tribunal that— (a)the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b)the employer has failed to comply with that Code in relation to that matter, and (c)that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25%. (3)If, in the case of proceedings to which this section applies, it appears to the employment tribunal that— (a)the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b)the employee has failed to comply with that Code in relation to that matter, and (c)that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the employee by no more than 25%. (4)In subsections (2) and (3), “relevant Code of Practice” means a Code of Practice issued under this Chapter which relates exclusively or primarily to procedure for the resolution of disputes.[110]The respondent asserts that the ACAS code on discipline is one which relates to claims of unfair dismissal as defined within various sections of the Employment Rights Act 1996.[111]The respondent argues that for the ACAS code to apply the claim must(a) contain an allegation of unfair dismissal and(b) such a claim must be within the Employment Tribunal’s jurisdiction. Jurisdiction for an unfair dismissal claim necessitates that a claimant either has sufficient length of service for the purposes of section 108 ERA 1996 or, the unfair dismissal claim is within the class to which section 108 has no bearing; section 103A being one such example.[112]The claimant’s case simply asserted that section 207A applies to breach of contract claims, that the foremost breach was a procedurally unfair summary dismissal and that the procedural steps of a dismissal process are clearly matters to which the ACAS code applies.[113]Neither party adduced any case law, any academic comment or made reference to the statute or the code of practice.[114]The statute, relevant to this point, states: “(4) In subsections (2) and (3), “relevant Code of Practice” means a Code of Practice issued under this Chapter which relates exclusively or primarily to procedure for the resolution of disputes.”[115]The relevant Acas Code of Practice is the Code of Practice on Disciplinary and Grievance Procedures published on 11 March 2015 ('the Acas Code').[116]The Foreword to the Acas Code provides: 'The Acas statutory Code of Practice on discipline and grievance procedures is set out in paragraphs 1 to 47 below. It provides basic practical guidance to employers, employees and their representatives and sets out principles for handling disciplinary and grievance situations in the workplace.[117]In the case of Rentplus UK Ltd v Coulson [2022] IRLR 664 HHJ Tayler stated: “ 21 It is, however, necessary to consider what constitutes a 'disciplinary situation'. Paragraph 1 of the Acas Code provides that 'Disciplinary situations include misconduct and/ or poor performance' [emphasis added]. It is clear that where the employer contemplates action because it considers that there are issues of misconduct or poor performance the Acas Code is engaged. Paragraph 1 of the Acas Code specifically excludes 'redundancy' and the expiry of a fixed term contract from giving rise to a disciplinary situation. 22 Paragraph 1 of the Acas Code makes it clear that where the employer considers that there is an issue of poor performance that needs to be addressed, it is a disciplinary situation, even if the matter is to be addressed under the capability procedure and that 'the basic principles of fairness set out in this Code should still be followed'. 24 In Holmes v Qinetiq Ltd (2016) UKEAT/0206/15, [2016] IRLR 664, [2016] ICR 1016 Simler J (President) held that the Acas Code does not apply to incapability because of ill health: 'In my judgment, the word “disciplinary” is an ordinary English word. A disciplinary situation is a situation where breaches of rules or codes of behaviour or discipline are corrected or punished. When an employee breaks rules or codes of behaviour, that is generally described as misconduct and gives rise to a disciplinary situation. Equally, an employer may have expectations about the way in which a job is to be performed and the minimum standards to be maintained. Where those expectations or standards are not met, that also gives rise to a disciplinary situation in respect of the poor or inadequate performance that arises. … If the employee faces an allegation of culpable conduct that may lead to disciplinary action, whether because of misconduct or poor performance or because of something else, the Code applies to the disciplinary procedure under which the allegation is investigated and determined. In other words, the Code applies to all cases where an employee's alleged actions or omissions involve culpable conduct or performance on his part that requires correction or punishment. Where there is no conduct or performance on the part of an employee that requires correction or punishment giving rise to a disciplinary situation, and most obviously that will be where no culpability is involved, disciplinary action ought not to be invoked and would be unjustified if it were.”[118]In my judgment the dismissal of the claimant in this case was caused by the respondent’s belief that the claimant had been attending work late, had failed to attend work and was possibly lying about the reason for her absence. She was also perceived as “disloyal”[119]I find that the conduct of the respondent, in dismissing the claimant on 12th February 2018, was a disciplinary process and one to which the Acas code applied.[120]There is no question in this case that the claim for breach of contract is within the employment tribunal’s jurisdiction. Nor is it argued that a breach of contract, arising from the respondent’s response to a disciplinary situation, is beyond the remit of the Extension of Jurisdiction Order 1994.[121]I disagree with the respondent’s submission that the Acas code only applies to unfair dismissal claims; the language of the section 207A and the code contradict that assertion. I take note that claims for unlawful dismissal exist under a variety of regulations and statutes other than the Employment Rights Act 1996 encompass divers situations to which the code could apply.[122]With regard to the respondent’s submission that the application section 207A is dependant on the claimant’s length of service, I accept that the claimant must establish that her claim is within the employment tribunal’s jurisdiction. In this sense the length of service requirement under section 108 of the ERA 1996 is simply a question of jurisdiction.[123]The Extension of Jurisdiction Order does not prescribe a particular length of service as a pre-condition for jurisdiction and to imply the jurisdictional regime of one statute into a distinct and discrete regulation would, on what has been put before me, quite wrong. If Parliament had such an intention It would doubtless had expressed it and Mr Hoyle doubtless would have brought it to my attention. I therefore conclude that this is a case to which the Acas code can be applied[124]Whether section 207A should be applied and, if so, how it should be applied considerations addressed in some detail in the cases of Slade v Biggs and Stewart [2022] IRLR 216 and Rentplus UK limited v Colson (above).[125]My February 2021 Findings of fact make clear that the respondents’ dismissal of the claimant, a teenage girl, was without forewarning, without investigation and without a meeting at which the claimant could begin to address the concerns which the respondents’ had in mind when the claimant was dismissed without notice.[126]There is no dispute between the parties that the respondents had failed to comply with the code.[127]I find that the respondents’ failure to comply with the code was unreasonable in the circumstances of this case.[128]The dismissal process was conducted in emotionally charged disagreement between the claimant and the daughter/granddaughter of the respondents. The decision making was ill considered, rushed and casual. Following the code would have provided time for calmness, a greater degree of objectivity and some considered enquiry before any decision was made. Had the respondent followed the code of practice the breach of contract may well have been avoided altogether.[129]For the above reasons, and those set out below, I consider it to be just and equitable to consider an uplift with respect to the damages which flow from the dismissal of the claimant.[130]Mr Hoyle argues that no award should be made, and if I was against him on that, it should be of a very low percentage. Mr Foster asserts this case demonstrates a series of avoidable failings of the most serious character.[131]I firstly take into account that the respondents’ business is a small business and, so far as I'm aware, has very limited human resources advice or experience.[132]But allowing for the above, the respondents failed to follow all of the procedural steps of the Acas code. Each breach was unavoidable The respondents were well aware that they had a workforce of quite young and relatively immature employees and it should have been, even without conscious reference to the Acas code, obvious that it needed the senior manager to inquire rationally and calmly into the circumstances before dismissing a young person.[133]I balance the above with Mr Hoyle’s argument that the claimant failed to appeal; even though it was apparent that her father had a claim for unfair dismissal in mind shortly after the dismissal had taken place.[134]I also take into account Mr Foster’s point that, at the relevant time, the respondents were asserting that the claimant had resigned; so there was no dismissal against which the claimant could appeal. I further take into account the value of the damages I will award and the fact that the respondent’s business in part funds a sanctuary for horses 135. in my judgment this is a case where it is just and equitable to impose an uplift of the award and the appropriate bracket sits somewhere between 20 and 25% in the particular circumstances in this case.[136]The procedural failings were fulsome but tempered by the respondent’s inexperience of the code and, in addition to the points made by Mr Hoyle, I give some weight the fact that the claimant herself, through her father might have sought to challenge the decision to dismiss the claimant. That factor is itself tempered by my finding that the respondents, after the claimant’s dismissal, stated an intention to contact the claimant’s mother to try and understand the situation better, but did not do so.[137]Taking all those matters into account I consider it is just and equitable to make an uplift of 20% on the awards of damages which arise from the claimant’s dismissal, but not those relating to underpayment, or non-payment of wages or holiday due during the claimant’s employment or outstanding on the date of dismissal.[138]I record my gratitude to the parties representatives for agreeing and calculating, the sums due based on my decisions.[1]The application for an order for wasted costs against the respondents’ representative is dismissed upon withdrawal by the claimant.[2]Upon assessment, all of the claimant’s costs incurred from the date of presentation of the claim (and net of VAT) were incurred as a consequence of the respondents’ unreasonable conduct.[3]The claimant incurred £2,000.00 of additional costs as a consequence of the respondent’s unreasonable failure to comply with the employment tribunal’s case management orders and prevented the conclusion of the 29th June 2023 costs application and necessitated the listing of a further hearing.[4]Subject to consideration of the respondents’ means, the claimant is entitled to all of the above costs.[1]This hearing was conducted on the morning of the 16th February 2024 during which I heard the evidence of both respondents who were then cross examined by Mr Foster on behalf of the claimant.[2]Prior to the commencement of the hearing I had read the entirety of an agreed 181 page bundle, the witness statements and the separate written submissions on behalf of the claimant and the respondents.[3]I allowed both parties the opportunity to present any further written submission by the 23rd February and I commenced my deliberations in chambers on 3rd March 2024.[4]The context of this judgment is found in my previous judgments with reasons, which are within the bundle at pages 7 to 54 (including Mr Foster’s note of the hearings).[5]Neither Mrs Barclay-Barnard nor Mrs Hillier attended the hearing held on the 29th June 2023 at which I ordered the respondents, subject to consideration of their means, to pay all of the claimant’s costs. That judgment has not been subject to a timely application for reconsideration or appeal. The claimant’s position[6]The claimant is a young woman, now with a child, of modest means. The legal cost of her success in litigation exceeds the value of her award in respect of her breach of contract claims. Save for an unspecified portion of her legal costs which Mr Foster has agreed to forgo, she faces the unhappy prospect of being a litigant whose legal costs exceed her award of compensation. She seeks all of her costs. The Respondents’ Position[7]The essence of the respondents’ case today is their inability to pay any award of costs because, as individual respondents and as a business partnership, they have incurred so much personal debt to; HMRC, local authorities, mortgage lenders and a range of banks and credit providers that neither is in a financial position to offer any redress for their unreasonable behaviour. Findings of Fact The Respondents’ financial circumstances: Stocklands Farm & The White Horse Rescue Charity[8]The Respondents are the joint owners of a small farm called Stocklands, mostly of grazing with a small parcel of woodland, a good number of outbuildings and a residential house [143]. They purchased the property for £655.000.00 in 2005 [140].[9]The respondents subsequently traded as Ellenwhorne Equestrian Centre; a partnership which provided livery and equestrian training.[10]Mrs Barclay Barnard lives in the farmhouse on the site.[11]Both respondents stated that their partnership of Ellenwhorne Equestrian ceased trading in September 2022.[12]The partnership has rented about 24 acres of the farm to a charity called White Horse Stables – Horse Rescue [168]. Both the respondents are recorded as trustees of the charity in the documents before me [173].[13]The records which the respondents have provided to me show that the farm stables a number of privately owned horses and 16 horses which are described as “horse rescue” [167].[14]The horse rescue charity has had an annual income that varied between £750,000 and £956,000 per annum over the last five years.[15]From that income the charity paid, and still pays, into the Ellewhorne Equestrian Centre bank account, at least £5,000.00 per month. That is an annual income of £60,000.00 per year.[16]From the evidence of both witnesses I conclude that the partnership no longer incurs costs of trading nor receives income from trading as an equestrian centre. The rental income from the charity belongs to the respondents as individuals.[17]However the respondents, as the joint owners of the farm, have mortgage and loan debts and interest accruing upon those debts.[18]Additionally both respondents have personal debts.[19]The respondents have chosen the documentary records they wished to produce to evidence their expenditure, income and debts. That evidence is relied upon to establish that neither has the means to make any payment towards their liability for the legal costs which Ms Goodsell incurred due to the respondents’ conduct in these proceedings.[20]The respondents have not provided any of the annual accounts or returns to HMRC for the most recent years of their partnership.[21]The respondents have provided one example of the partnership’s bank statement for December 2023; some 15 months after the business ceased to trade.[22]That statement [163-4] shows credits to the partnership’s account from “White Horse” (the charity) close to £9,000.00 (including a single payment of £5,000.00 for the monthly rent). It also shows two payments totalling £900 from the partnership bank account to the White Horse charity. There were other smaller payments indicating that the partnership was supplying, at cost, stable hay and labour to the charity in 2023. 23. £7,400.00 of the December 2023 income received from the charity was paid to the respondents’ mortgage creditors.[24]I also note that Mrs Hillier personally received much smaller sums from the charity; £550.00 in November 2023 [111- 112] and £130.00 in December 2023 [109].[25]I am thus doubtful that the partnership has completely ceased its activities. It appears to still engage in some economic activity with the charity, but I do accept that it no longer offers equine services or training to the public. The potential Sale of Stocklands Farm[26]I note that, the farm house and its three acres of land have been advertised for sale at £850,000.00 [187]. The balance of the farmland (34 acres of pasture, equestrian buildings and woodland) do not appear to be for sale at this time and continue to generate an income of £60,000.00 per annum.[27]In the documents before me the whole farm has, over the last four years, been valued at £1,650,000.00 [151] and more recently at “just under” £1,000,000.00 [162 ], if a “very speedy sale” was required.[28]I take into account that an estate agent’s valuations are an art not a science and that house prices, and agricultural land values, fluctuate considerably over time.[29]I also take into account Mrs Barclay Barnard’s evidence that she had sold another property which she owned and invested all the profit from that sale into the Stockland’s farmhouse and its three acres of land. Given that she did not pay her capital gains tax on the aforesaid sale, which she told me amounted to £23,000.00, it appears she made a substantial investment in her home and garden to make it more attractive to prospective purchasers.[30]The farmhouse, which was previously for sale with a guide price of £1,000,000.00, is now for sale with an asking price of £850,000.00 and has not attracted an offer of purchase, It has recently been advertised with an asking price of £825,000.00.[31]Although the partnership has owned the farm for 19 years it has not reduced the initial loan. In addition to a second mortgage there are three charges over the property relating to unpaid council tax and debts owed to HFC bank [140].[32]The total mortgage debt, including outstanding interest payments, currently stands at £709,094.07.[33]The HFC loan, secured against the property and the outstanding debt to the local authority evidence at least a further £73,000.00 debt. The total partnership debt which relates to the property is , on the evidence before, me around £784,000.00.[34]When the farmhouse is sold it appears that the entire value of the sale will be spent repaying debts and the various costs of the sale.[35]I accept Mr Grant’s submission that, if the whole farm was sold for £1,000.000.00, after the costs of sale, the partnership would be likely to receive a little over £195,000.00.[36]How that sum might be divided between Mrs Barclay-Barnard and Mrs Hillier (her daughter) would be a decision for them to make. If it were an equal share then each would receive around £97,600.00.[37]That sum would be more than sufficient to discharge Mrs Hillier’s personal debts of around £40,000.00. It would be insufficient to extinguish her mother’s personal debts of around £100,300.00, unless Mrs Hillier agreed to a slightly unequal apportionment of the total sale funds in favour of her mother.[38]It would also mean the £60,000.00 income received from the White Horse charity would cease and Mrs Barclay- Bernard would possibly need to seek accommodation through social housing provision.[39]It is apparent from the respondents’ evidence that their current intention, as their sales brochure describes, is to sell the farm house, but not the majority of the land. A Sale of the Farmhouse and its Gardens[40]If the farmhouse is sold for its current asking price of £825,000.00, after the costs of the sale, the balance would be sufficient to extinguish, the partnership’s mortgage, council tax and HFC debts.[41]By retaining the land currently rented to the charity the income of £60,000.00 per annum will remain available to the respondents for so long as they retain its ownership .[42]The £60,000.00 per annum income would go some way to incrementally reducing their respective personal debts, and the associated interest payments.[43]Depending upon how mother and daughter choose to apportion the annual rental income, it could also be sufficient to provide for reasonable rental accommodation for Mrs BarclayBarnard.[44]In addition to the rental income the respondents would also retain the value of the 34 acres of mortgage free grazing and woodland. Based on the estimates in the documents before me, the estate agent appears to value the land at £210,000.00 to £240,000.00 for a sale which was neither “forced” nor “very speedy”.[45]In my judgment the respondents’ current intention is to sell the farm house and gardens,, but not 34 acres of land; strongly indicative of an intention to retain the benefit of the rental income and the residual value of the land for the foreseeable future.[46]I also accept that the reduction of the asking price for the farmhouse and gardens is evidence that the sale process maybe prolonged; measured in months not weeks. The ability of the Respondents to pay any part of the costs order.[47]There are two broad themes which I have examined based on the evidence of both respondents and the claimant’s assertions.[48]The first is on the basis that the farm/or farm house will not be sold for a substantial period and that their respective current finances reflect their medium term (three years) future prospects. The respondents submit that, on this basis Mrs Barclay-Barnard cannot reasonably afford to pay any contribution to the claimant’s costs and Mrs Hillier can only reasonably afford a modest sum and for a fixed duration.[49]The second is that the Farmhouse and Gardens will be sold and the respondent’s financial circumstances will materially improve. That improvement will allow Mrs Hillier to make a reasonable contribution to the claimant’s costs. However, Mrs Barclay- Barnard will still have her personal debts and the costs of alternative accommodation. The Respondents‘ ability to afford any contribution to the claimant’s costs[50]The level of the respondents’ debts, the amounts of interest they pay and there level of income are not in dispute.[51]I have taken the witnesses through aspects of their respective bank statements. I have read through all the documents in the bundle and in the case of Mrs Hellier clarified aspects of her expenditure.[52]Based on their evidence, and where appropriate, taking each respondent in turn, I find as follows:[53]Most of the respondents’ expenditure is essential.[54]Each respondent’s individual income, absent the sale of the farmhouse, will not be sufficient to discharge their respective personal debts.[55]Mrs Hillier is an employee whose role does not offer any material prospect of promotion.[56]Mrs Barclay-Barnard is seventy seven years old and her personal income is her state pension. She manages the rental income from the charity and other ancillary provisions of service to the charity. That income is spent on the partnership’s debts and interest payments.[57]There are prospects of increasing the respondent’s income by a modest increase the cost of the rent to the charity and to make a modest charge to the small business run by Mrs Hillier’s daughter on the respondents’ farm.[58]A 1 percent increase in the rental (which is considerably less than the current rates of inflation) and a nominal charge to Mrs Hillier’s daughter could provide an additional £720.00 per annum.[59]Whilst none of these would be palatable to the respondents, each would be reasonable and practical to implement.[60]Within the records of the respondent’s personal expenditure there are several types of expense which might be viewed as the small pleasures of ordinary life. These include Mrs Barclay- Barnard’s:a. Purchase of lottery tickets and premium bonds [66, 67].b. Paying £59.99 for Sky TV and Spotify services [68].c. Eating out in restaurants on a modest number of occasions [66-68]d. Two purchases of jewellery, as presents.[61]Mrs Barclay-Bernard, during questions from myself, described the expenditure above as part of normal living. I agree that for many people occasional eating out and subscription media services are normal. The question for me is whether it is reasonable for a respondents in this case to prioritise making redress for their unreasonable conduct over their small pleasures.[62]In Mrs Hillier’s case Mr Grant’s argument [ paragraph 64.2] on her behalf was that she could, for a defined period of no more than two years, sustain a contribution to the claimant’s costs of £50 per month: a total of £1,200.00.[63]Before reaching my conclusions I took into account the following additional material factors:[64]That I should discount the 20% of the total award I now know was attributed to VAT, that was not payable.[65]That Mr Foster had, rather generously, undertaken not to seek a proportion of his fees above those which were not recovered from the respondents. Consequently, the claimant will not herself be contractual bound to pay all of her costs.[66]That, if I make an order costs to be paid it is unlikely that, in the absence of an agreed plan for a series of payments, the sum due will be enforced through the County Court and additional interest payment may accrue.
Conclusions
[67]I have taken into account all of Mr Grant’s submissions and I find that the state of the respondents’ finances are such that, an award of the whole of the claimant’s costs order (less the element of VAT) ordered would not be proportionate in all the circumstances set out above.[68]However, I am not persuaded that the respondents are incapable of paying a reasonable portion of the costs order.[69]In my judgement the respondents are immediately able to afford small but regular payments and will have, if they act reasonably, the ability to afford a significant part of the costs order.[70]In my judgment the respondents are currently in a position to offer for sale the acres of amenity woodland and/or a part of the ten acres of land not rented to the charity (albeit that may well require allowing a purchaser rights of way over the land rented to the charity). The sale of one acre would be sufficient.[71]The respondents could sell a part of the parcel of the land now rented by the charity, to the charity; reducing the charity’s long term rental costs and providing the respondent’s with a degree of financial relief. Again, one acre would be sufficient.[72]They are similarly in a position to take an alternative approach and increase the rental income from their land rented to the charity.[73]Lastly, in my judgment the prospects of a successful sale of the Stocklands farm house have increased with the reduction in the asking price.[74]The above possibilities are practical and reasonably achievable for the respondents and will enable the respondents to pay a reasonable part of the claimant’s costs over the next two to three years.[75]In light of all the evidence before me, I have concluded that a proportionate and reasonable sum to order is £5,000.00.