Mr C Heath v Roseland Property Capital Ltd: 2410445/2018
EMPLOYMENT TRIBUNALS
Case No 2410445/2018
Between
Mr C HeathClaimantRoseland Property Capital LtdRespondent
Before
Employment Judge RossMr L Wilson (instructed by Counsel) for claimantMs L Amartey (instructed by Counsel) for respondentDate 20 March 2019
JUDGMENT
[1]The respondent’s application for costs on the basis that the claim had no reasonable prospect of success, Rule 76(1)(b) ET Rules of Procedure 2013, is not well founded and fails.[2]The respondent’s application for costs on the basis that a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of proceedings (or part) or the way that the proceedings (or part) have been conducted, Rule 76(1)(a) ET Rules of Procedure 2013, is not well founded and fails.
REASONS
[1]The claimant who was professionally represented throughout brought a claim to this Tribunal for unfair dismissal and unlawful deduction from wages. The wages claim related to(i) non-payment of holiday pay and(ii) non-payment of the claimant’s final month’s salary. The claim was presented on 9 May 2018.[2]The claim was defended. The case was originally listed for hearing on 27 July with standard directions issued once the proceedings had been served. The claim was postponed on the application of the respondent. It was re-listed without objection from the claimant to be heard over two days on 3 and 4 October 2018.[3]On 16 August 2018 the claimant’s representative informed the Tribunal that the claimant was withdrawing his claim due to the adverse effect on both his and his wife’s health of the proceedings. The Tribunal issued a judgment on withdrawal on 30 August 2018 which was sent to the parties on 6 September 2018. On 4 October 2018 the respondent presented an application for costs.[4]At the outset of the hearing it was agreed that Employment Judge Ross would give a decision in relation to the costs application.[5]If that decision was to award costs then the claimant would be asked about his ability to pay at that juncture and further consideration would have been given to the amount of costs sought by the respondent.[6]The other issue at the outset of the hearing was whether or not the Tribunal would hear evidence in relation to the witness statement provided by the claimant. Employment Judge Ross determined that this was a case which had been dismissed on withdrawal and it would not be appropriate now to hear evidence from the parties.[7]However EJ Ross read the documents relied upon by the parties and the claimant’s statement.
The Issues
[8]The Tribunal reminded itself that when considering Rule 76(1)(a) and Rule 76(1)(b) the Tribunal must adopt a two-stage test. Firstly, it must consider whether either of the grounds for making the order was made out. Secondly, the Tribunal must consider whether or not to exercise its discretion to award costs.[9]The Tribunal turned to the first ground which was that the complaints brought by the claimant had no reasonable prospect of success.[10]The Tribunal reminded itself that the claimant brought three claims, a constructive dismissal claim, unlawful deduction from wages claim in relation to nonpayment of his final month’s salary and a claim for holiday pay claim.[11]The Tribunal reminded itself that in an unfair constructive dismissal claim the Tribunal must first determine whether there were breaches of the implied duty of trust and confidence. The breaches relied upon by the claimant were clearly set out at paragraph 63A to G of the claim form, they included the alleged subjection of the claimant to poor and bullying treatment by the respondent’s Mr Berman, unjustifiably placing the claimant on garden leave despite him not being dismissed or resigned at that time, failing to address his informal complaint about Mr Berman’s behaviour, failing to address his formal grievance or provide him with the grievance process, removing the claimant from the company website and taking unlawful deductions from his wage by withholding his December salary.[12]The Tribunal would have had to determine factually whether or not these matters occurred. The Tribunal would then have to consider individually or cumulatively whether these facts amounted to a breach of the implied duty of trust and confidence and if so, whether they were the reason or principal reason for the claimant’s resignation. The Tribunal would also have to consider whether the claimant delayed too long and affirmed the breach.[13]In relation to the holiday pay claim the Tribunal would have had to decide the start and finish of the holiday year, the amount of holiday taken by the claimant as compared to his statutory entitlement and whether there was any accrued but outstanding holidays.[14]For the unlawful deduction from wages claim the Tribunal would have had to consider whether the claimant received less than the sum properly payable on the relevant occasion. It is the claimant’s case that he was not paid his final month’s salary. It is the respondent’s case that a clause in his contract of employment entitled the respondent to deduct sums from the claimant’s wages. If the claim had proceeded to hearing the Tribunal would have had to scrutinise the deductions clause and consider whether it fulfilled the requirements of Section 13 (1)(a) and 13(2)(a) ERA 1996. It was the respondent’s case that the clause at 6.3 of his contract, page 114, entitled such a deduction to be made. It was the claimant’s case that the clause was clearly aimed at overpayments, loans, advances or the direct cost of repairing any damage or loss and could not be relied upon in the way the respondent suggested, namely withholding his salary because they considered the claimant was in breach of his contract of employment.[15]The respondent’s key submission was that the claimant’s claim for constructive dismissal had no reasonable prospect of success because any reasonable Tribunal would have found that the real reason the claimant resigned was because the respondent invited him to a disciplinary hearing by letter of 3 January 2019 and the claimant resigned very promptly on the same day after receiving that letter.[16]The Tribunal is not satisfied that resigning within a very short period of time of being invited to a disciplinary hearing inevitably means that the claimant’s claim for constructive dismissal would have failed.[17]If the Tribunal had heard this case, findings of fact would have been made in relation to each allegation of a breach of the implied duty of trust and confidence. Only after hearing all that evidence would the Tribunal be able to conclude whether there had been individually or cumulatively a breach of the implied duty of trust and confidence and whether the reason or principal reason the claimant resigned was those individual or cumulative breaches or whether there was some other reason for his resignation.[18]Accordingly, it is not possible to say that the claimant’s claim for unfair constructive dismissal had no reasonable prospects of success.[19]The second argument relied on by the claimant was that the claimant had no prospect of any meaningful success of his complaint had proceeded to a full hearing. The respondent alleged that because the claimant had been subjected to wellfounded disciplinary proceedings it was inevitable he would have been dismissed in any event and a Tribunal would have found 100% deduction for Polkey.[20]Once again, without hearing the evidence, the Tribunal cannot make that finding. The claimant disputed that the disciplinary proceedings were well founded.[21]In any event, even if the Tribunal had made a decision that the claimant had been unfairly constructively dismissed but reduced the compensation by 100% by reason of a Polkey deduction, that does not amount to a finding that the case had no reasonable grounds of success. Case law suggests that an individual is entitled to pursue a case to hearing to receive a declaration he has been unfairly dismissed, even if no compensation is awarded.[22]Much of the evidence drawn to my attention by the respondent related to the respondent’s invitation to disciplinary hearing and further investigation which postdated the termination of the claimant’s employment. There does not appear to be a dispute that the claimant had resigned because paragraph 23 of the response states “by letter of 2 March 2018 the respondent wrote to the claimant stating that had the claimant not resigned he would have been dismissed on 8 January 2018”.[23]Given that the respondent accepted the claimant had resigned, the issues in relation to conduct appear to be mainly relevant to remedy, not to the issue of whether or not his constructive dismissal claim has grounds for success.[24]The unlawful deduction from wages claim in relation to salary clearly had prospects of success because there was a dispute between the parties as to whether or not clause 6.3 of the claimant’s contract (the deductions clause) was applicable in circumstances where the claimant had worked during December but the respondent failed to pay him.[25]On the face of it, there was likely to have been a prospect of success in relation to the holiday pay claim if the claimant had received less than his statutory entitlement. Without hearing the evidence, it is not possible to assess the merits of that claim.[26]Finally, the respondent’s representative relied on issues of credibility to suggest that the claimant’s claims had no reasonable prospect of success. In the absence of hearing any evidence it is not possible for the Tribunal to make a reliable assessment of the claimant’s credibility, particularly in circumstances where there is a factual dispute between the parties in relation to the matters relied upon by the parties.[27]The Tribunal turns to the other ground relied upon by the respondent, namely that the claimant acted unreasonably in the conduct of the proceedings.[28]The first ground relied upon was pursuing an unmeritorious complaint.[29]The Tribunal relies on its reasoning above to find that in the absence of hearing evidence from the parties with regard to the claimant’s claim for constructive dismissal, unlawful deduction from wages and holiday pay claim it does not make any finding that the claimant was pursuing an unmeritorious claim.[30]The respondent’s representative relied on costs warnings it had issued to the claimant. The Tribunal is not satisfied that the claimant pursued proceedings which he knew were bound to fail and in doing so, acted unreasonably, therefore failed to engage with a costs warning letter.[31]There is no dispute that the respondent sent the claimant costs warning letters. However, without hearing evidence from the claimant and the respondent and considering the issues raised by his constructive dismissal claim and unlawful deduction from wages claim the Tribunal is not satisfied that his claim had no reasonable prospects of success and was therefore without merit.[32]The respondent relied on the failure of the claimant to comply with disclosure obligations.[33]There is a dispute between the parties about the precise extent of the documentation relevant to the claim.[34]Both parties were professionally represented. The respondent considered the claimant had failed to comply with their disclosure obligations.[35]If a party considers documents are relevant to a claim which another party has not disclosed, it is open to the party to write to the Tribunal to seek an order. The timescale involved in this matter is relatively short in the sense that the parties were obliged to send one another a list of documents by 27 June.It appears the parties complied with that obligation. The issue here was not the list but copies from the list and the nature of the documents which should be disclosed.[36]The respondent made an application for specific disclosure to the Tribunal on 17 July 2018. The claimant’s representative replied to the request seeking additional time to seek instructions. The application was referred to a Judge. However the application was not adjudicated on before the claim was withdrawn on 16 August 2018.[37]The Tribunal finds there was a dispute between the parties as to the extent of the relevant documentation sought by the respondent. A dispute about relevant documentation is not uncommon in the Employment Tribunal. The Tribunal finds that it is not unusual in litigation for parties to fail to agree about the extent of disclosure or for there to be some slippage in the timetable for documents or copies to be disclosed. In these circumstances the Tribunal is not satisfied that that failure to disclose all the documentation which the respondent was seeking amounts to unreasonable conduct. The mechanism in the Tribunal to determine such a dispute, namely an application for specific disclosure had not yet concluded. In these circumstances the Tribunal is not satisfied that the suggested failure to comply with disclosure obligations amounts to unreasonable conduct.[38]Accordingly, the Tribunal is not satisfied that there was unreasonable conduct on the part of the claimant or his representative.[39]Even though the Tribunal has determined there has not been a breach of Rule 76(1)(b) or Rule 76(1)(a), for the sake of completeness the Tribunal has gone on to consider the second part of the test, namely whether to exercise its discretion to make an award of costs.[40]The Tribunal reminds itself that costs do not follow the event in the Employment Tribunal. It reminds itself that an order for costs remains the exception rather than the rule see Yerrakalva -v- Barnsley Metropolitan Borough Council 2012 ICR 420. The Tribunal reminds itself of all the circumstances in the case. Both parties were legally represented.It is in the public interest for claims to be settled, or withdrawn, because withdrawals can lead to a saving of costs and it would be very unfortunate if claimants were deterred from dropping claims because of the prospect of a Costs Order. McPherson -v- BNP Paribas (London Branch) 2004 ICR 1398 CA.[41]The Tribunal reminds itself in this case the catalyst for the withdrawal of the claimant’s claim was the fact that both he and his wife were unwell and finding the proceedings were aggravating their health. They made a choice not to proceed. The Tribunal notes the withdrawal was not made at a very late stage, just before the hearing. It was made in August, approximately 2 months before the scheduled hearing.[42]Taking all those circumstances into account even if either of the grounds are made out I exercise my discretion not to make an order for costs.