Mr David Corbineau v The Hook Group Ltd: 3201360/2017
EMPLOYMENT TRIBUNALS
Case No 3201360/2017
Between
Mr David CorbineauClaimantThe Hook Group LtdRespondent
Before
Employment Judge Brook, Sitting aloneIn person for claimantMs Mona Bayoumi (instructed by Counsel) for respondentDate 1 March 2018
JUDGMENT
[1]By consent the Respondent to this action is changed to “The Hook Group Limited” this entity being the new name of the Respondent;[2]On admission by the Respondent the dismissal of the Claimant on 30 May 2017 was unfair and the Respondent shall pay the Claimant the total sum of £865.40 by way of basic and compensatory awards to include a 25% uplift on the compensatory element by reason of the Respondent’s failure to follow the relevant Acas Code of Practice;[3]By admission the Respondent failed to pay the Claimant his statutory entitlement to a payment in lieu of notice and the Respondent shall pay the Claimant the sum of £115.40 in respect of the same;[4]There shall be no order for reinstatement.[5]The sums due to the Claimant shall be paid by the Respondent without deduction within 28 days.
REASONS
[1]This matter came before the Tribunal as a claim in unfair dismissal. The Claimant represent himself and the Respondent was represented by Ms Mona Bayoumi of counsel, attended by Ms Rhian Hall her instructing solicitor. The Claimant asserts that he has a further claim against the Respondent arising out of his dismissal in respect of his potentially increased liability to capital gains tax on his shares in the Respondent. However that claim is not before the Tribunal not least because as a claim in contract it would fall foul of the jurisdictional limit of £25,000 and Mr Corbineau has expressly reserved any such claim to the County or High Court where there is no statutory cap on the recovery of contractual damages.[2]There was no claim before the Tribunal to pursuant to the provisions of Sections 1 and 11 of the Employment Rights Act 1996 and I have not been invited to adjudicate on the precise terms and conditions of the contract of employment that existed between the Parties in virtue of the variation to that contract in 2014 under which, as is common ground between the Parties, Mr Corbineau came to receive a reduced monthly payment of £50. Mr Corbineau confined his claims in the Employment Tribunal to unfair dismissal and payment in lieu of notice and it is a feature of these proceedings that the Respondent made pleaded admissions in respect of both claims within its Response. The change of the Respondent’s name from HelloU Limited to The Hook Group Limited came about because on 24 October 2017 this entity changed its name. The new name was substituted by consent at the commencement of this Hearing.
Background
[3]This is an unusual case in that prior to his dismissal the Claimant had been employed by the Respondent company for some ten years and in April 2014 his salary was reduced by agreement to the monthly sum of £50 (fifty pounds) and this payment continued until his dismissal some three years later. The reason for this variation was that the then HelloU Limited was a start-up company that in 2014 found itself in financial difficulties which resulted in the dismissal of most of its then staff though not the Claimant. At that time there was a close personal friendship between the Claimant and the now CEO and principal shareholder, Mr Andrew Fidler, and it seems that special provision was made for the Claimant to remain on the company payroll at this nominal monthly salary although he was not called upon to undertake any work. At least one reason for this arrangement appears to have been that whilst the Claimant remained an employee then potentially his liability for capital gains tax was reduced under the special Inland Revenue provisions applicable to start up companies. Mr Corbineau’s capital gains tax liability has yet to crystallise and the Respondent Company remains a private company the shares of which are not listed on AIM or the stock market, thus any potential CGT consequences of dismissal, if any, lie in the future. Be that as it may this CGT issue is not a matter for the Employment Tribunal today or indeed at all.[4]Mr Corbineau believes that one of the contractual variations to his employment contract in April 2014 was that he was entitled to return to substantive work and commensurate salary once the Company had overcome its then financial difficulties. It seems that early in 2017 there had been some talk of him returning to substantive work but the Claimant had thought the terms and conditions of that proposed return unsatisfactory and he remained on the £50 per month arrangement until his employment was terminated. As I have indicated the Tribunal was not called upon to determine the terms and conditions applicable to the contractual variation of April 2014 and I mention the foregoing principally by way of background but also because the Claimant’s belief that at some stage he is entitled to return to substantive employment with the Respondent came to have a bearing on the question of reinstatement.
The Issues
[5]There was no agreed list of issues between the Parties but in the light of the Respondent’s admissions, all of which were accepted by the Claimant, the Tribunal was only called upon to consider his financial losses flowing from the termination of his employment. These obviously included his monthly payment of £50, the basic award calculated by reference to 10 full years of employment, and the payment in lieu of notice calculated on precisely the same basis. The Respondent made admissions in respect of all these claims and pleaded the sums it acknowledged were due to the Claimant in respect of the same. The Claimant accepted these sums as correct and thus no useful purpose would be served by rehearsing these matters herein precisely because the Respondent made admissions and accepted liability. I raised with the Respondent whether there was a Polkey v AE Dayton [1988] 3 ALL ER 974 argument whereby the Respondent could seek to argue that the Claimant would have been dismissed in any event had there been a proper procedure and was told by Ms Bayoumi that no such argument was advanced. Furthermore, although it was known that the Claimant had succeeded in mitigating his loss by obtaining alternative employment post his dismissal, the Respondent did not seek to set this off against the compensatory element of the award. Given the admissions and the undisputed calculations the only remaining matter was that of whether the Respondent should be ordered to reinstate the Claimant. Reinstatement[6]As I have said this was an unusual case in that for the final few years in which his employment contract remained in place the Claimant was effectively paid a retainer of £50 per month and in this way stayed on the Respondent’s payroll though in practice he was not called upon to undertake any work. The Claimant maintains that it was part of the arrangement under which he took £50 per month that he was contractually entitled to require the Respondent to take him back into substantive employment at a commensurate salary when the Respondent was in a financial position to do so. I heard no evidence as to whether the financial position of the Respondent Company had improved but in any event I was not called upon to determine whether there was a contractual provision requiring reinstatement as Mr Corbineau told me that he wished to reserve all such matters, including his potential claim in respect of an increased liability to capital gains tax, to another jurisdiction where if successful his remedy would not be restricted to the Tribunal £25,000 limit on contractual claims. I was therefore only called upon to decide the issue of reinstatement on ordinary principles without regard to any alleged express contractual provision that might have had a bearing on reinstatement.[7]The evidence of Mr Andrew Fidler, the principal shareholder and CEO of the Respondent Company, was twofold. First he recognised that, although he made no admissions to there being such contractual entitlement, if reinstated to his £50 per month position then Mr Corbineau would in early course inevitably request a substantive post on a commensurate salary. Mr Fidler said that in 2014 one of the reasons why the Claimant would otherwise have been dismissed were it not for the special arrangement made in respect of him, and apparently no other employee at that time, was that his skill sets no longer met the requirement of the Company as it had developed from the early days of start-up. The tasks that the Claimant had undertaken prior to 2014 were now much diminished and those that remained were dispersed and dealt with by various members of the current staff. For his part the Claimant asserted that his skill sets were well-tailored to the requirements of the Respondent and that he could be flexible and accommodate any changes that might have occurred since 2014. He pointed to the fact that he had had been offered a substantive post in 2017, which he had however declined, as evidence that he was regarded as employable by the Respondent. He would seek a substantive post. There thus seemed some basis for considering reinstatement.[8]However, Mr Corbineau made it entirely clear that though Mr Fidler and he had once been very good friends he no longer trusted Mr Fidler and indeed suggested that Mr Fidler had engaged in certain unlawful acts in relation to the company though he was not specific as to what these might have been. For his part Mr Fidler stated that in 2014 he had gone out of his way to protect the Claimant so that he remained on the payroll albeit at £50 per month when others had not been so fortunate. By entering into this arrangement Mr Fidler, and indeed Mr Corbineau, acknowledged that this was thought to preserve Mr Corbineau’s favourable capital gains tax position, though it is fair to say that this has never been put to the test. Mr Fidler stated that for various reasons he too no longer had trust and confidence in Mr Corbineau and that the situation had become much worse during the course of last year. It was clear to me that neither thought this situation was likely to change in the near future or at all. Thus, whatever the position on the availability of substantive employment might be, on the issue of trust and confidence each of these individuals held precisely similar views about the other.[9]It is common ground that the Respondent Company is a small start up concern and even though it might be possible for Mr Corbineau to undertake substantive work, either now or in the near future, by reason of the Company’s size there is no realistic possibility of him and Mr Fidler not having dealings with each other even if that involved little actual geographical contact. It was tempting to reinstate Mr Corbineau to the status quo anti, that is to say that he merely be reinstated on the payroll at £50 per month but with no requirements for him to undertake any work. However, Mr Corbineau made it clear if reinstated even to that extent then he would seek substantive employment within the Respondent Company. That decision would fall to Mr Fidler to make, certainly he would have a large say in any such decision. That prospect, where each individual had expressed a breakdown in trust and confidence with the other with no obvious prospect of reconciliation, has persuaded me, quite apart from whether there is a substantive role he could take on now or in the near future or whether the Claimant has any contractual right to insist on the same, that it would be inappropriate to order reinstatement. The position might have been otherwise if I had been called upon to determine the precise terms and conditions of the contractual arrangements between the Parties and, for example, I had found that the 2014 variation had effectively amounted to a zero hours contract with a retainer under which no work was expected from the Claimant unless and until he was called upon to perform some suitable role. However, I was not called upon to determine the terms and conditions of the contractual arrangement between the Parties at the time of the 2014 variation and that issue therefore remains at large. Consequential Losses[10]One final point needs to be addressed and that is the issue of the Claimant’s consequential losses. It appears that there was no Schedule of Loss served by the Claimant in these proceeding though that of course would not prevent him seeking losses that directly flowed from the termination of his employment and were referable to his contact of employment. By way of example had Mr Corbineau the contractual benefit of a motor vehicle, or perhaps health insurance, which he lost by reason of his dismissal then these could have been taken into account. Although Mr Corbineau did not press the point he indicated he had been put to consequential expenditure in terms of air flights between the UK and Australia and similar such ancillary expenditure. In my view such expenditure does not directly relate to the dismissal and are too remote a consequential loss to be recovered within these proceedings for unfair dismissal. The agreed sums by way of a basic award, the loss of income for a twelve-month period following dismissal, the 25% uplift, and the contractual sum in relation to a payment in lieu of notice are all that the Claimant is entitled to recover as financial losses in these proceedings.
The Issues
[1]This matter was heard on 23 February 2018 and the Judgment promulgated and compensatory awards in unfair dismissal, and his claim in wrongful dismissal for a payment in lieu of notice, these succeeded on pleaded admissions by the Respondent. The Claimant’s application for reinstatement was not successful. At the Hearing there was no application for costs by either party.[2]By email dated 9 March 2018 the Claimant wrote to the Tribunal enquiring whether a Certificate was available that “proves I was unfairly dismissed” to which request, by letter from the Tribunal dated 13 March 2018, the Claimant was referred to the Judgment which “sets out the findings in the case”. This settled that request.[3]By letter dated 15 March 2018 Messrs Lewis Silkin for the Respondent made written submissions in support of an Application for costs in the sum of £20,000 against a detail Cost Schedule totalling £20,288.88 including VAT. In making that application Lewis Silkin stated that they were content for this to be decided on written submissions. By letter dated 28 March 2018 the Claimant submitted a vigorous defence to the Respondent’s Costs Application in the course of which he reserved his position as to making his own Costs Application in the sum of £1,491.14, with the request that if the Respondent’s Costs Application was to be considered then he would prefer a hearing “in situ” so he might have the opportunity to make oral submissions. The Claimant subsequently confirmed he was making a Costs Application.[4]By email dated 21 March the Claimant wrote to the Tribunal requesting a reconsideration of the decision not to reinstate him to his previous employment. In support of that Application the Claimant cited that this decision had unwanted consequences regarding his reserved County/High Court claims and in particular had potentially adverse future capital gains tax consequences for him. The Claimant went on to say that whilst he had developed his mistrust and lack of confidence in the Respondent as a result of his “experience with and treatment by the Respondent”, the Respondent, according to the Claimant, only later developed its view as a result of the Claimant expressing his own views. I take it that the point being made is that it was not the Claimant’s conduct at work that was in issue though I remind myself that the evidence of the Respondent at the Hearing was that as well as the (mutual) breakdown in trust and confidence the Claimant’s skill sets were no longer considered relevant.[5]In support of his request for reconsideration of my Decision not to reinstate him to the Respondent’s employment Mr Corbineau made an entirely new submission to the effect that if reinstated to his previous position of what was effectively a retainer of £50 a month then he would not seek substantive work from the Respondent Company, at least not unless or until his other reserved issues with the Respondent had been adjudicated or otherwise resolved. Mr Corbineau advanced this new proposition because he felt it would have no adverse consequences for the Respondent yet it would he believed, amongst other advantages for him, place him in a more favourable capital gains tax position in relation to his shareholding in the Respondent Company. This entirely new submission had not, or so it seemed to me, been made known to the Respondent and accordingly I caused a letter to be written to the Respondent’s solicitors, copied to the Claimant, setting out this new submission and inviting the Respondent’s observation and comments. In the event the Respondent replied to the effect that it was content with the Judgment, had no interest in reinstating the Claimant on the new basis or at all, and still had no trust or confidence in the Claimant. At the Hearing on 23 February 2018 the unambiguous evidence of both the Claimant and of Mr Andrew Fidler, the principal shareholder and CEO of the Respondent company, was that each had lost trust and confidence in the other and that there was no prospect of any rapprochement between these individuals. Reconsideration of the Judgment[6]Rule 70 of the Employment Tribunal Rules provides a Tribunal with the power to reconsider any Judgement where it is necessary to do so in the interests of justice. Case law confirms that the 'interests of justice' include circumstances where a decision was wrongly made as a result of administrative error, that a party did not receive notice of the proceedings leading to a decision made in the absence of that party, or that new evidence has become available since the conclusion of the Tribunal hearing, the existence of which evidence could not reasonably have been known of or foreseen at the time of the hearing. These are examples of circumstances that directly concern the principle of natural justice going to parties receiving a fair hearing.[7]In all judicial proceedings there is an underlying public policy principle that there should be finality to the matters litigated. Reconsiderations are thus limited specific exceptions to the general rule that Tribunal decisions should not be reopened and relitigated. It is not a method by which a disappointed party can get what might be called a 'second bite of the cherry' on matters already properly judicially decided. Appeals to a higher court are a different matter & must be based on errors of law. In Stevenson v Golden Wonder Ltd [1977 IRLR 474] the Employment Appeal Tribunal held that the review procedure was not intended to give a party the opportunity of a rehearing at which the same evidence can be rehearsed but with different emphasis, or that further evidence and/or propositions can be advanced which, though available at the original hearing, were not then advanced.[8]The Rules provide that Judgements can be reconsidered only where it is necessary in the sense set out above, the Rules do not provide a litigant unsuccessful in some aspect or other of their case with an automatic right to reconsideration of the Judgment. An unsuccessful litigant might well feel that the interests of justice require the decision to be reconsidered, particularly where the effects of that Judgment are thought to be disadvantageous and they come to think that had they taken a different approach, or adduced more evidence/advanced a different proposition, then the Judgment would have been more favourable to them. However, the basis for reconsideration are narrow, essentially where something has gone very wrong with the procedure such that it involved a denial of natural justice or something of that of magnitude. Furthermore, it is clear that the interests of justice relate to the interests of both sides. In the appeal case of Reading v EMI Leisure Ltd the Court, in considering the claimant's appeal of a Tribunal’s refusal to reconsider a decision, observed that "when you boil down to what is said on the claimant's behalf it really comes down to this; 'that she did not do herself justice at the hearing so justice requires there should be a second hearing so that she may'." That appeal failed for precisely that reason and it seems to me that Mr Corbineau is saying much the same, that there was something he should have said at the time of the Hearing and has now, rather belatedly, come to consider it would be a good idea to change his position from that he actually advanced at the Hearing because, if accepted, this could place him in a better tax position as well as having other collateral advantages. He had the opportunity to advance this new proposition, namely that he be reinstated on the basis that he would not seek actual work, but did not take that opportunity, indeed he took the position that if reinstated he would seek substantive work from the Respondent.[9]I am not persuaded that it is in the interest of justice to review this Judgment. That said I was prepared to put Mr Corbineau's new proposition to the Respondent in case it wished to reach some agreement on the point. It did not. There is thus no basis at all on which to review the Judgment. I would add that even if there was a proper basis for Review it is highly unlikely that I would have granted the requested reinstatement. There plainly remains the fundamental breakdown in trust and confidence between the Parties, inimitable to any employment relationship no matter how artfully that employment might be arranged, and there is a further issue as to whether an employment relationship can exist at all in the absence of reciprocity of obligations, namely on the part of an 'employer' to provide work and if so provided of an 'employee' to undertake that work. It is not, however, necessary for me to explore such issues as I have found that Mr Corbineau has not provided adequate grounds on which to reconsider the Judgment within the Rules. Cost Applications[10]Turning first to the Respondent’s costs application. The Employment Tribunal is often regarded as a no cost jurisdiction though this is not entirely correct. Pursuant to Sections 76 to 78 of the Tribunal Rules there is power to make a costs order or, in the case of a party acting in person a preparation time order, against a party found to have acted vexatiously, abusively, disruptively or otherwise unreasonably in either bringing proceedings or the way that the proceedings have been conducted, or in persisting in any claim or response that had no reasonable prospect of success. In making it's substantial costs application against the Claimant, indeed the maximum this Tribunal can award, the Respondent argues that there was no point in the Claimant seeking a hearing of his unfair dismissal claim given the Respondent's comprehensive pleaded admissions, and that he has put the Respondent to considerable unnecessary cost and inconvenience. For his part the Claimant's relatively modest application would appear to have been prompted by the Respondent's cost application and little else.[11]Though the Respondent contends that it was entirely unnecessary for the matter to proceed to a Tribunal hearing, as it had made full admissions in respect of the Claimant’s pleaded case and thus there was nothing more to be decided, this is not entirely correct. The Claimant’s pleaded case was based on what I referred to as the “£50 retainer” and he did not, as it seems the Claimant sought to suggest in the course of interlocutory correspondence, seek a decision as to what his salary should properly have been. Whilst it is true to say that before me he touched upon what he considered the salary issue it was no part of his pleaded case and thus simply was not an issue before this Tribunal. Doubtless in recognition of this Mr Corbineau did not pursue this aspect of the matter with any vigour. That said it is not correct to say that there was no remaining issue for the Tribunal to adjudicate. The one issue that the Claimant plainly wanted resolving was that of reinstatement and whilst it is true to say that both he and Mr Fidler had fallen into a relationship of mutual distrust and lack of confidence, Mr Corbineau sought to persuade me that the geographical distance that would prevail, he lives in Australia and Mr Fidler in the UK, were he to be reinstated and take up substantive work would mean that he and Mr Fidler would not come into close contact and thus no interpersonal problems would arise. Whilst it is true to say that Mr Corbineau remains a shareholder in the Respondent company, and to that extent is unlikely to deliberately sabotage the workings of the company, it seemed to me that Mr Corbineau misunderstood the effect of a loss and trust and confidence in the context of employment, particularly in such a relatively small business. There was no doubt from the evidence before me at the Hearing that he was keen to recover his employment with the Respondent. My reasons for declining his application for reinstatement are as set out in the Judgment made in the light of the evidence then before me. Mr Corbineau was completely candid in his admission that he had lost trust and confidence in the Respondent, in particular Mr Fidler, but appeared to genuinely believe that geographical considerations would work to nullify the effect of that mutual distrust. I was not persuaded by that proposition though he was entitled to make it.[12]As to the amount claimed by the Respondent this is a surprisingly large sum given the admissions. From the detailed schedule provided by the Respondent it seems to me that a great deal of the sum claimed appear to relate to matters of wider scope than just that of the pleaded admissions, that is to say matters relating to the contractual claim which Mr Corbineau has expressly reserved to the Courts. In the particular circumstances of this case the matter of reinstatement was arguable and it was always open to the Respondent to list the matter at an early stage for a preliminary hearing on the reinstatement point, all other aspects of the Tribunal Claim being admitted, which I would have expected to limit the costs referable to Tribunal matters. I have little doubt that Mr Corbineau did make himself unpopular with both the Respondent and with Lewis Silkin. However, this was not simply an ordinary matter of unfair dismissal but had, and continues to have, potentially wider aspects and implications which on the face of it seems to have resulted in the greater part of the cost schedule produced in the support of the Respondent’s application. I am not persuaded that the Claimant’s conduct in relation to the Tribunal Claim was improper and am not minded to grant the Respondent’s cost application.[13]Turning to the Claimant’s cost application, whilst this is for a relatively modest sum precisely similar considerations apply. His Tribunal Claim effectively became an application for reinstatement and whilst he had an argument to make in respect of that in the end it did not succeed. Though the costs sought are more likely to relate solely to the Tribunal matters it does not seem to me that there has been any improper conduct on the part of Lewis Silkin or the Respondent that could trigger a costs award, indeed quite the reverse. As I have already indicated the Employment Tribunal is not a venue in which “costs” follow the event. I am therefore not minded to grant the Claimant’s application for costs against the Respondent.