Employment Judge JonesMs L Mullin (instructed by Counsel) for claimantDate 12 June 2017
JUDGMENT
[1]The Respondent made unlawful deductions from the Claimant’s wages from the date of his transfer from Kier to the Respondent’s employment on 25 August 2010.[2]The Claimant is entitled to a remedy.[3]The Respondent is ordered to pay the Claimant the following amounts: Unpaid toolbox talks: (2010 – 2015) = £1335.14 Unpaid training: (2010 – 2015) = £800.21 Shortfall of wages in 2010, 2011 = £11,000.00 Carded and aborted jobs: (£3814.68 + £2137.14) = £5,951.82 all other jobs between 2010 – 2015 where incorrect codes applied £52,384.70 Total = £71,471.87[4]The Respondent is ordered to pay the Claimant the sum of £71,471.87.
REASONS
[1]The liability Hearing of this matter was conducted by this Tribunal on 20 and 21 April 2016. Today was the remedy Hearing.
Findings of Fact
[2]The liability judgment of the Tribunal was that the Respondent made unauthorised deductions from the Claimant’s wages and breached Regulation 4(4) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The Tribunal ordered that the clauses of the Claimant’s contract should be restored to that of his Kier’s contract. The Tribunal also listed a remedy hearing on 11 July 2016.[3]The Claimant was ordered to provide a detailed schedule of loss and the Respondent to provide a counter schedule of loss by a set date.[4]On 6 July 2016, it became apparent to the Tribunal that the parties would not be ready to proceed to a remedy hearing on 11 July. That hearing was changed to a preliminary hearing so that the Tribunal could case manage the matter as required. A written summary of the hearing was promulgated by the Tribunal on 19 July. The remedy hearing was listed for 23 September. The issues raised in the parties’ correspondence to the Tribunal prior to that hearing and in their submissions on 23 September showed that there was no agreement between the parties on the identity of the codes that had been applied by Kier, the transferor, during the Claimant’s employment.[5]The hearing in September was adjourned again so that the Claimant could make all attempts to obtain information from Kier that would definitively identify the relevant codes.[6]The Claimant produced codes at the liability Hearing in April 2016 which he said were the version 6 codes applied to his case. He has consistently relied on the same codes throughout this case.[7]At the liability Hearing, the Respondent’s position was that the Claimant was not entitled to be paid any version of the national housing federation (NHF) codes/schedules. Mr Prouten’s evidence was that the information that the Respondent as the transferee received from Kier was that the Claimant was paid a flat rate of £370.80 per week. During the liability Hearing, the Respondent changed its position. The Respondent’s evidence was then that the Claimant was paid using version 5 codes. During Mr Watts’s evidence, he referred to information that he had discovered while investigating the Claimant’s grievance which confirmed that the Claimant had been paid using version 5. He referred to an email that the Respondent received from Kier. The Tribunal adjourned so that the Respondent could send the email to the Claimant and the Tribunal. This was clearly a document that should have been disclosed earlier as it was relevant to the matters at issue in the case. It was not a document that the Respondent had inserted in their bundle or brought to the Tribunal to assist their defence of the Claimant’s claim.[8]Mr Watts arranged for the email and attachment to be sent to the Tribunal. It was an email dated 5 August 2016 from David Lovell, Commercial Manager of Kier Building Maintenance to Kikky Boboye at the Respondent’s HR. The subject matter of the email was “Newlon – direct employed ops paybook 100517 + 2% for July 2010”. In the body of that email it stated that the excel spreadsheet of the current bonus pay values to directly employed operatives on the new line HT contract was attached. The Respondent confirmed at the liability Hearing and today that the Claimant was one of those directly employed operatives. The email stated that there is a minimum bonus pay value for any single order at (£11.46 + 2% July 10 increase) £11.49. It then stated that this is per order i.e. if two operatives attend, they share the payment. The email then stated that on the Newlon contract there are the following local agreements: if an operative had an abortive visit on a pre-arranged appointment (not a cold call) they are paid the minimum bonus amount (as item 1 above). Also, if while on a specific job the material costs are in excess of the bonus paid, the operative would be paid the actual materials costs plus £14 per hour of their time.[9]It is likely that the relevant codes were attached to that email as an excel spreadsheet. Kier provided this information to the Respondent as part of its due diligence in relation to the TUPE transfer.[10]At the liability hearing in April the issue was whether the Claimant’s terms and conditions had been altered by the Respondent on the transfer and whether there was justification for doing so. There was limited discussion on the actual codes as that related to remedy. The Respondent maintained that they were version 6 codes that had been altered from the standard ones so that they were bespoke to Kier.[11]The email of 5 August 2010 was forwarded to the Tribunal with the codes attached. Those were printed off by the Tribunal clerk and given to the Judge. The Tribunal judge had them with her today. They are different from the document which the Respondent relied on today in its bundle, which started at page 8. That document also states that it is a set codes received from Kier attached to the email on 5 August 2010. Mr Prouten indicated to the Tribunal that those were the version 6 bespoke codes that the Respondent had received from Kier attached to the email of 5 August 2010. In addition, the Tribunal finds from today’s Hearing that Mr Prouten sent an email to the Claimant on 1 June 2016 after the liability Hearing in April attaching yet another entirely different set of codes which he stated were the correct codes that needed to be applied to the Claimant’s work following this Tribunal’s judgment. The Respondent has therefore produced three different versions of the codes that it maintains it received from Kier.[12]Mr Prouten confirmed that the Respondent did have a practice of cutting and pasting documents to emails. Mr Prouten also confirmed this on 1 June during email correspondence with the Claimant about the codes that were now applicable to his work, following the liability judgment. The Tribunal finds the Respondent’s evidence unreliable on which attachments were sent with the email from Kier.[13]The Claimant produced version 6 codes to the Tribunal as the applicable codes to his work when employed by Kier and the codes that should have transferred with him to the Respondent. Mr Prouten confirmed today that they are version 6 codes. The Claimant’s copy has a separate page attached to the front which says that the attachment was created on 2 September 2010 at 16.03pm and that it was last modified on 22 September 2010 at 10.10am. That is part of the properties of the document. It also states that it was last modified by Jim Eyles who was employed by the Respondent in September 2010. The Claimant could not explain how Mr Eyles came to be modifying a document that he obtained from Kier. The Claimant was transferred from Kier to the Respondent in August 2010. It was his case and has been case throughout this matter that these codes were given to him by Kier and that they represent the codes that were applied during his employment with Kier.[14]At the liability Hearing this Tribunal found that the Claimant obtained a copy of his personnel file in November/December 2013 and discovered that the Respondent was in possession of all the documents supporting his claims. It is possible that he got a copy of the correct codes from that file. It was after this discovery that the Claimant presented a grievance to the Respondent about his pay. It was dated 13 October 2014 and made with the assistance of the union. In his response to the Claimant’s grievance, Mr Prouten did not say that the Claimant had been paid in accordance with the codes or that the Claimant was better off. He accepted that the Claimant had not been paid the minimum payments for toolbox talks, training and aborted and carded jobs in accordance with his Kier contract. He stated that he Claimant and those who transferred with him had been transferred on a bespoke system that the Respondent were unable to adopt. The Respondent then tried to persuade the Claimant to accept changes to his terms and conditions of employment but the Claimant refused and insisted on his Kier terms. As the Respondent continued to refuse to pay him in accordance with his Kier terms the Claimant issued his claim in the Employment Tribunal.[15]Although the Claimant previously stated that codes applied to him at Kier were version 6 codes without any alterations, in today’s hearing he confirmed that the codes applied to him when he was at Kier were version 6 codes with some modifications and additions to suit Kier’s requirements. This accords with what Mr Watts’ evidence at the liability Hearing that the codes sent to the Respondent by Kier were version 6 but with modifications. They have been referred to in these proceedings as a “bespoke” set of codes.[16]In preparation for today’s hearing, as there was no agreement between the parties on what the actual codes were that were applied to the Claimant when he was employed by Kier, the Tribunal ordered the Claimant to seek disclosure from Kier of the codes and of copies of his payslips. The Claimant solicitors had some difficulty in obtaining that disclosure and they asked the Tribunal to order Kier to provide that information. On 21 January 2017 the Tribunal ordered Kier to produce “copies of the SOR code used by Kier in calculating the Claimant’s pay when he was employed from 1 October 2007 until his transfer to the Respondent in August 2010. Also, copies of his payslips and P60s from 2007 to 2010.” Kier was also asked to inform the Tribunal whether the Claimant was paid using version 6 of the National SOR codes when he was employed by Kier or whether they had their own bespoke set of codes from version 6.[17]Kier failed to respond to the Tribunal. However, Kier did provide the Claimant with copies of his payslips and P60s and those were disclosed to the Respondent.[18]There was further correspondence between the parties and the Tribunal in which the Respondent sought disclosure of copies of the correspondence between the Claimant’s solicitors and Kier. From correspondence produced today the Tribunal finds that the Claimant’s solicitors did disclose that correspondence to the Respondent and the Tribunal in an email dated 1 March 2017. Neither the Respondent’s representative or the Tribunal had received those documents before today’s hearing but having seen them, the Tribunal can confirm that the Claimant and his solicitors have complied with the orders.[19]The payslips that Kier disclosed to the Claimant do not show any breakdown of the amount paid or the rates at which the Claimant was paid. The 2010 pay slips show that the Claimant was paid at a basic rate leading up to the transfer and this confirms his evidence on that point.[20]We spent some time in today’s hearing closely examining the actual codes that the parties rely on. The Tribunal finds that the codes the Claimant relies on show a total cost for the job, the applicable SOR code and a charge for the labour. That is the sum of the total costs minus the materials costs. It is the Claimant’s case that when employed at Kier he was paid the labour charge in full and without any deduction. Mr Prouten who was the contract’s manager for the Respondent, confirmed in is evidence that the codes relied on by the Claimant are version 6 codes. He also stated that if Kier had paid the Claimant in the way that the Claimant stated then it is unlikely that Kier would have made a profit on the job and it would not have been commercially sensibly to do so. Mr Prouten’s evidence was that when the Respondent decided in June 2011 to pay the Claimant using the SOR codes it decided to deduct 40% from the total cost and pay the Claimant the balance. It was not his evidence that this was in keeping with the terms of the Claimant’s contract with Kier. However, it was also the Respondent’s case that the Claimant was better off in the way that it applied the codes rather than how he was paid while at Kier.[21]In support of that position the Respondent referred to its summary of the Claimant’s yearly pay which they calculated from the payslips provided by Kier and the Claimant’s P60s. They calculated that the Claimant was paid £30,044.74 for the tax year 2008/2009, £22,689.01 for the tax year 2009/2010 and £22,864.71 for the tax year 2010/2011. Mr Prouten agreed that the 2010/2011 amount was not the complete year as Kier had not provided all the payslips for that year. In contrast, the Claimant earned £31,260.71 for the year 2011/2012 at the Respondent and £45,693.70 in the tax year 2012/2013, £43,615.62 for the tax year 2013/2014 and £51,092.66 for the tax year 2014/2015.[22]The Respondent submitted that this proved that the Claimant was better off in the way that they paid him.[23]The Claimant’s case was that this was misleading. His case was that the figures had been distorted because he had to do more jobs for the Respondent in order to maintain his level of earnings. The Claimant’s evidence was that because the Respondent was taking 40% of the total cost before paying him, he was being paid less which meant that he had to work longer hours and do more jobs in order to make up his earnings. His evidence was that the Respondent was not comparing like with like. The Claimant confirmed that he paid to train himself to become a plasterer so that he could offer to do a wider variety of jobs for the Respondent. The Respondent was unable to dispute that the Claimant had done more jobs since his transfer than he had done at Kiers.[24]It is likely that the Claimant did many more jobs since 2013 to make up his income as the costs of each job was subject to a deduction of 40% from the total before he was paid. The Claimant eventually left the Respondent’s employment in October 2016.[25]The Respondents produced an additional witness today called Grant Cawston who had been employed by Kier between 2002 and 2008. Mr Cawston continued to have some contact with Kier post 2008 as he has been involved in City and Guilds training. However, Mr Cawston actual knowledge of the rates that were being charged was unclear to the Tribunal since he was not responsible for processing those papers or teaching people how to use the codes. He also left Kier some time before the Claimant’s transfer to the Respondent. The Tribunal did not find his evidence helpful.
The Law
[26]Regulation 4 of the Transfer of Undertaking Protection of Employment Regulations 2006 states as follows at 4(2) – “Without prejudice to paragraph (1), but subject to paragraph (6) and Regulations 8 & 15 (9), on the completion of a relevant transfer –(a) all the transferors right, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and(b) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised group of resources of employees, shall be deemed to have been an act or omission of or in relation to the transferee(b) is not relevant.” At 4(4) “Subject to regulation 9, in respect of a contract of employment that is, or will be, transferred by paragraph (1), any purported variation of the contract shall be void if the sole or principal reason for the variation is (a) The transfer itself, or (b) A reason connected with the transfer that is not an economic, technical, or organisational reasons entertaining changes in the workforce” At 4(5) “Paragraph (4) shall not prevent the employer and his employee whose contract of employment is, or will be, transferred by paragraph (1) from agreeing a variation of that contract if the sole or principal reason for the variation is – (a) A reason connected with the transfer that is an economic, technical or organisational reason entailing changes in the workforce; or (b) A reason unconnected with the transfer.” Applying Law to Facts[27]It is this Tribunal’s judgment that the Respondent failed to pay the Claimant in accordance with the bespoke version 6 codes that it received from Kier and that this resulted in him suffering unlawful deduction of wages. It has never been the Respondent’s case that it paid the Claimant in accordance with the information it received from Kier.[28]Which codes should have been applied? In this Tribunal’s judgment, the Respondent received the correct codes from Kier during the TUPE transfer process in August 2010. However, these were never disclosed to the Claimant and he was never paid in accordance with them.[29]In this case, the Respondent has produced at least three versions of the codes. The Respondent had the correct codes from Kier since August 2010. However, it was not until the second day of the liability hearing in April 2016 that it disclosed this to the Claimant. In this Tribunal’s judgment, it is highly likely that the Respondent was attempting to conceal this information from him. Although they had the codes and the information from Kier, they failed to pay the Claimant the correct amount on any codes even after he brought a grievance and subsequently issued his claim in the Tribunal.[30]Contrary to the Respondent’s position at the liability Hearing, the Claimant had not always been paid at a flat rate of £370.80 per week when he was employed by Kier. The Respondent has since confirmed the Claimant’s evidence that this was the amount that he was paid by Kier as the contract was wound down before the transfer took place. Despite knowing this, the Respondent continued to pay the Claimant that amount for a year before he brought a grievance and persuaded it to restore him to the codes. Even then, they did not pay him in accordance with information that they had from Kier but chose to deduct 40% from the total costs thereby reducing the amount due to him. While at Kier the Claimant had never been paid using the version 5 codes, which was Mr Prouten’s position during the liability Hearing. There was no reference to version 5 codes in today’s Hearing.[31]Mr Prouten confirmed in evidence today that the information provided by Kier in the 5 August 2010 email does not refer to any deductions that Kier took off the amount that should be paid to the Claimant. Even so, the Respondent’s decided to make a 40% deduction. The Claimant was an employee who transferred to the Respondent under the TUPE Regulations. As such, the TUPE Regulations confirm that his contractual rights are to remain the same. During the discussions that the Claimant had with Mr Prouten and Ms Layvis before the transfer, it was confirmed to him that his terms and conditions would not change that being would remain the same.[32]It is this Tribunal’s judgment that on balance, the version consistently provided by the Claimant throughout this case is the correct version that should have been applied to his work with the Respondent.[33]In this Tribunal’s judgment, the terms and conditions in relation to pay were as follows:33.1 That the Claimant would be paid according to Kier’s SOR codes version 6.33.2 That he would receive a minimum pay of £11.49 for the following:(a) no access to appointments (no calls)(b) jobs aborted because the job specification is wrong or works cannot be undertaken under self certification agreement.(c) Appointment aborted as only minor(s) present in property (i.e. under 16 years of age.33.3 That he would be paid for toolbox talks and for training.[34]The Respondent has failed to comply with all those terms.[35]The Respondent’s counter schedule purported to shows that the Claimant has been paid for toolbox talks and aborting jobs. However, in the liability Hearing, the Respondent’s position and Mr Prouten’s evidence was that it does not pay for toolbox talks, training and aborted calls. This was also the position in its response to the Claimant’s grievance dated 12 December 2014. The two positions are contradictory and the Respondent’s case is inconsistent and unreliable.[36]This Tribunal does not accept the Respondent’s counter schedule. It is this Tribunal’s judgment that the Claimant was not paid for toolbox talks, training and aborted jobs contrary to the terms of his contract with Kier. The Claimant was subjected to unlawful deductions of wages in relation to the toolbox talks, training and aborted jobs.[37]The Respondent’s case was that the Claimant was better off with their arrangements. It was never the Respondent’s case that it had complied with TUPE Regulations.[38]It is this Tribunal’s judgment that the Respondent has failed to comply with the TUPE Regulations. The Claimant has suffered losses because of this. The Claimant should have been paid upon his transfer in accordance with the version 6 SOR codes that Kier provided to the Respondent and the Claimant provided to the Tribunal.[39]The Tribunal had not found the Respondent’s case to be credible. The Tribunal has found the Claimant’s case more credible in that he has been consistent in the case he presented in these hearings. He has explained the calculations in his Schedule of Loss when challenged during the remedy Hearing and in correspondence between the parties as disclosed to the Tribunal.[40]It is this Tribunal’s judgment that the Claimant suffered unlawful deductions of wages because of the Respondent’s refusal to pay him in accordance with the codes Kier provided to it at the time of the TUPE transfer in August 2010. The Claimant had to do many more jobs to supplement his income and to keep it at the same level as before. Since 2011 the Respondent’s decision to deduct 40% from the total costs has reduced the sums due to him and this was in contravention of the TUPE Regulations. The Claimant has suffered unlawful deductions of wages and the Respondent is ordered to pay him the amounts claimed.[41]The Respondent confirmed today that it did not challenge the Claimant’s calculations and that they are correct.[42]The Tribunal therefore orders the Respondent to pay the Claimant in accordance with the schedule of loss which totals £71,471.87. That amount is made up as follows:[44]The Claimant has lost £52,384.70 in earnings between 2011 and 2015. From the date of transfer in August 2010 to 2011 the loss of earnings was approximately £11,000 as the Claimant was paid a flat rate of £370.80 per week for the first year of his employment with the Respondent. The Respondent failed to pay the Claimant in accordance with the codes it received from Kier when the Claimant transferred in 2010, in breach of the TUPE Regulations.[45]The Claimant is also owed the following for unpaid training/toolbox talks.[46]For unpaid training he is owed as follows: For 2011 - £313.56. For 2013 he is owed £72.99, for 2014 he is owed £342.12 and for 2015 the figure for training is £71.54. The total owed for training is £800.21.[47]For unpaid toolbox talks: The Respondent confirmed that there were ten toolbox talks in 2010 - the Claimant is therefore owed £172.90 as he was paid an approximate hourly rate of £17.29. For 2011 he should have been paid £191.62 for 11 toolbox talk at the rate of £17.42. For 2012 he should be paid £291.36 for 12 toolbox talks and for 2013 should be paid £291.96 for 12 toolbox talks at the rate of £24.33. For 2014 he should be paid £285.10 for ten toolbox talks at the rate of £28.51, and lastly, for 2015 he should be paid £102.20 for five toolbox talks at the rate of £20.44. The Claimant worked out his hourly rate by dividing his annual salary for each year by the number of hours worked over 224 days and then multiplying it by the number of hours the number of toolbox talks he attended which lasted approximately an hour each. Total amount for toolbox talks is £1335.14.[48]The Respondent failed to pay the Claimant for carded jobs which was part of the terms and conditions of his contract with Kier prior to the transfer. The contract stated that he would be paid the minimum rate of £11.49 for each of these. The amount due for carded jobs between 2010 and 2015 is £3814.68.[49]The Respondent failed to pay the Claimant for aborted jobs. The Claimant’s contract with Kier stated that he was to be paid £11.49 for each of these. The amount due for aborted jobs is £2137.14.[50]The total due to the Claimant as a remedy for the Respondent’s failure to comply with the TUPE Regulations is as follows: 51 £2137.14 + £3814.68 + £1335.14 + £800.21 + £11,000.00 + £52384.70 = £71,471.87.[52]The Respondent is to pay this amount to the Claimant forthwith.
The Law
[1]The Claimant made an application for an Order that the Respondent pays what he referred to in the application as ‘additional and unnecessary costs’ incurred in pursuing his remedy in this case. He did so following the judgment that the Respondent had breached Regulation 4(4) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 and had made unlawful deductions from his wages and the remedy judgment promulgated on 15 June after a Remedy Hearing on 9 March. The Claimant’s application costs was dated 14 July 2017.[2]The Claimant applied for an Order for costs order under rule 76(1) of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 as set out below. The Claimant submitted that the Respondent acted vexatiously, abusively, disruptively, or otherwise unreasonably in the manner in which it defended these proceedings and in particular; the way it dealt with the information the Claimant needed for the remedy part of the Hearing.[3]The Claimant referred to and quoted from the remedy judgement. The Tribunal found that the Respondent had received the correct codes from Kier during the TUPE transfer process on 5 August 2010 but never disclosed them to the Claimant and never paid him in accordance with those codes. This was so even though it is clear that, having had the disclosure, the Respondent would have known what the correct codes were from that date. It was found as a fact that the Claimant continued to be paid incorrectly up to his departure from the Respondent’s employment in October 2016.[4]The Claimant submitted that the Respondent should be ordered to pay the costs incurred in attending and preparing for the hearings on 11 July and 23 September 2016 and the final remedy Hearing on 9 March 2017. The hearings on 2016 were both abortive remedy hearings. He contended that costs should be awarded against the Respondent because of its failure or unreasonable conduct in continuing to assert that its codes were correct and failing to provide the Claimant with the necessary information. The Claimant submitted if the Respondent had complied with duty of disclosure or agreed that the codes put forward by the Claimant were the correct ones, the preliminary hearings would not have been necessary or even if they were required, the work to prepare for them would have been significantly less for the Claimant. Also, that had the Respondent agreed that his codes were the correct ones, the matter could have been resolved thereby negating the need for a remedy Hearing.[5]The Respondent opposed the Claimant’s application for costs. In its response the Respondent contended that there had been no need for the hearing on 11 July and that it had been adjourned because of the Claimant’s failure to serve a schedule of loss and that therefore there should be no award made in respect of the costs of that hearing.[6]The Respondent’s case was set out in Mr Jagpal’s letters of 1 August and 5 October 2017. In the second letter, he attached some emails that he had previously sent to the Claimant’s solicitors. Those were dated 24 May and 13 June 2016. In them he sought to disclose documents to the Claimant which would assist him in providing his schedule of loss. Also in those letters the Respondent did not disagree with the Claimant’s case that the calculation of the schedule of loss in this case was difficult and complicated as the amount of compensation due to the Claimant depended on particular jobs he had done over the years together with the actual codes/prices applied to each of those particular jobs. In their response to the application the Respondent stated that it had never concealed any information and that the postponements in July and September 2016 were because of the Claimant’s failure to properly prepare.
Law
[7]The Claimant’s application for costs is made under Rule 76(1)(a) and (b) of the Tribunals Rules of Procedure which states as follows: “A tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that –(a) A party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or(b) any claim or response had no reasonable prospects of success; or(c) n/a”[8]It was the Claimant’s contention that rules 76(1)(a) and (b) were engaged.[9]The Tribunal considered the case of Yerrakalva v Barnsley Metropolitan Borough Council [2012] IRLR 78. In that case Mummery LJ stated that: “The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there 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”.[10]The Tribunal was also aware of the case of Power v Panasonic UK Limited EAT 0439/04 in which Clarke J described the exercise to be undertaken by the Tribunal as a two-stage exercise. First, the Tribunal must answer the question whether the paying party has acted unreasonably, vexatiously, abusively, disruptively, or (as it was an earlier set of rules) brought a claim that was misconceived. If so, the Tribunal should go on to the second part of the test which is to ask itself whether to exercise its discretion by awarding costs against that party. It was also in that case that the EAT made it clear that the principle set out in the case of Calderbank v Calderbank has no place in the Employment Tribunal jurisdiction. A Tribunal should not simply award costs because a litigant has failed to beat an offer made between the parties.[11]It is in the second part of the exercise that the Tribunal could consider the paying party’s ability to pay and whether that should influence its decision to make an order for costs or how much to order the paying party to pay.[12]The Tribunal is aware that the fundamental principle in the employment tribunal is that costs are the exception rather than the rule and that costs do not follow the event.[13]The question of unreasonable conduct and how it can affect the issue of costs was explored in the cases of Daleside Nursing Home Ltd v Matthews UK EAT20519/2008 and Dunedin Campbell Housing Association Limited v Donaldson UK EAT0014/09. In those cases the court held that where a litigant had lied that may be taken as unreasonable conduct. Indeed to not to take such a lie as unreasonable conduct may be considered to be perverse on the part of the Tribunal. There is no rule of law that a lie on its own must mean the costs order should be made but it will be taken into consideration as part of the assessment of the case. In the case of Arrowsmith v Nottingham Trent University [2011] EWCA Civ. 797 Rimmer LJ held that in such a case: “it will always be necessary for the tribunal to examine the context and to look at the nature, gravity and affect of the lie in determining the unreasonableness of the alleged conduct.… Where, in some cases, a central allegation is found to be a lie, that may support an application for costs, but it does not mean that, on every occasion that a claimant fails to establish a central plank of the claim, an award of costs must follow.”[14]Rule 77 provides that a party may apply for a costs order at any stage up to 28 days after the date on which the judgement finally determining the proceedings were sent to the parties. No such order may be made unless the paying party has had a reasonable opportunity to make representations (in writing or at a hearing, as the Tribunal may order) in response to the application.[15]Rule 78 addresses the issue of the amount of costs orders. It states that a costs order may order the paying party to pay the receiving party a specified amount, not exceeding £20,000, in respect of costs of the receiving party. The order can also be for the paying party to pay an amount arrived at after detailed assessment carried out either by a County Court in accordance with the Civil Procedure Rules 1998 or by an employment judge applying the same principles. A costs order may also order the paying party to pay the receiving party a specified amount as reimbursement of all part of a tribunal fee paid by the receiving party or in relation to witness expenses. If the paying and receiving parties agree as to the amounts payable then the costs order can also be made in that amount.[16]The Tribunal makes the following findings on this matter.
Findings of fact
[17]In December 2015 the Claimant complained that the Respondent had breached Regulation 4(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and that he had suffered unlawful deductions of wages. He complained that the Respondent had failed to pay him the amounts that he had been paid under his contract with Kier’s which was also subject to an annual increase of 3% on the codes cited in the National Schedule of Rates. The Respondent defended the matter which was set down for a full hearing on 20 and 21 April 2016.[18]In its Response to the claim, the Respondent’s case was that it had not received any information from Kier about the SOR codes which the Claimant referred to, but that as far as it was concerned the Claimant was contractually entitled to be paid at the rate of £370.80 per week. In contradiction of that position, Mr Prouten’s live evidence in the Hearing was that the Claimant and his colleagues had been on version 5 of the SOR codes when they transferred under TUPE from Kier. However, on the second day of the Hearing, during Mr Watt’s evidence (the Respondent’s witness) about the grievance appeal that he conducted, he confirmed that Kier had provided the Respondent with the applicable codes to the Claimant’s work and that they were a set of bespoke version 6 SOR codes. Kier had sent the codes over to the Respondent as an attachment to an email dated 5 August 2010 as part of its due diligence disclosure in the TUPE transfer process. It had never been the Respondent’s case that the TUPE Regulations did not apply or that there had been an economic, technical, or organisational reason entailing changes in the workforce or that the terms of the contract permitted it to make such a variation. The Respondent’s case has simply been that the Claimant has been better off under the way in which they decided to pay him as opposed to paying him in accordance with contract. In its ET3 it stated that the Kier SOR codes were impractical. It also confirmed that the Respondent had not paid the Claimant for toolbox talks, training or abortive calls.[19]Mr Watts had the email and a set of codes sent over to the Tribunal and the Claimant’s Counsel on the second day of the Hearing during his evidence. It was the Respondent’s case that those codes had been attached to the email. The Claimant contended that the codes were not the ones that had been applied to his contract while he was employed by Kier.[20]The Claimant’s live evidence in the liability Hearing was that the codes in the bundle from page 170 onwards had been given to him by the manager at Kier and were the relevant SOR codes, version 6, with yearly 3% increases added on. It was his case that those codes should be applied to his work. This was disputed by the Respondent. It was his case that he had sent them to the Respondent in 2013.[21]Even though the Respondent now says that it had always been candid about the email of 5 August 2010, it is noted that it was not referred to in the Response to the claim. The Response stated that it had not been possible for the Respondent to continue to operate the Kier SOR codes and that instead, the Claimant was paid an average salary as he declined to sign up to the Respondent’s terms and conditions.[22]The Respondent had the codes from the date of the transfer but the Claimant was not paid according to them. Although Mr Watts discovered the email and codes at the time of the grievance appeal they were not given to the Claimant and he was not informed that the Respondent now had that information.. Having found that information, the Respondent did not start to pay the Claimant in accordance with the correct codes at that time.[23]Instead the Respondent responded to his grievance by offering him new terms and conditions which he considered to be less favourable than his Kier terms and conditions and he therefore refused to accept them. The Respondent did allow him to submit claims using a different set of codes. It then deducted 40% from the money due to him. It was never the Respondent’s case that this was in accordance with his Kier contract which meant that it was in breach of the TUPE Regulations. In the liability Hearing, the Respondent’s case was that the Claimant had accepted new terms and conditions and had, in effect, given up his Kier terms. There was no evidence that he had done this. The Claimant had always protested and insisted on his Kier terms. This was evidenced by the number of meetings he had with management, his grievance, his appeal and his decision to bring this claim to the employment tribunal while he was still employed by the Respondent. This is detailed in the judgment on the liability Hearing.[24]Although the Respondent was sent the applicable codes by Kier in August 2010 this had not been disclosed to the Claimant or to the Tribunal until the second day of the hearing in April 2016. The Claimant had been complaining about this internally since 2010. In addition to attaching the relevant codes, the email from Kier informed the Respondent the Claimant was entitled to a minimum bonus pay value for any single order at a rate of £11.49, that he would be paid if he had an abortive visit on a prearranged call and that if while on a specific job and the material costs in excess of the bonus paid, the operative (i.e. the Claimant) would be paid the actual material costs plus £14 per hour of their time. The Claimant’s contract with Kier provided for the Claimant to be paid a set amount for his attendance at toolbox talks and training. Although he was TUPE transferred to the Respondent, it failed to comply with any of these terms of his contract and the Tribunal found that he was never paid in accordance with those.[25]On 21 April, this Employment Tribunal gave judgment that the Respondent had made unauthorised deductions from the Claimant’s wages and had breached the TUPE Regulations. The Tribunal ordered the clauses of the Claimant’s contract to be restored to that of his Kier’s contract and that there should be a remedy hearing listed for 11 July.[26]Following the liability Hearing in April the Tribunal in its written judgment ordered the Respondent at paragraph 59 to pay the Claimant in accordance with the bespoke Kier SOR codes that were sent to them in August 2010. Also, the Respondent was ordered to pay the Claimant in accordance with the custom and practice document also signed in August 2010 and included in the document provided to the Claimant and also provide to the Respondent on the Claimant’s transfer. The Respondent was ordered to restore the terms of the Claimant’s contract to that which he had with Kier prior to the transfer.[27]At paragraph 60, the Respondent was ordered to cooperate with the Claimant’s solicitors to provide evidence of the jobs the Claimant did from 2010 to enable him to prepare his schedule of loss. The Claimant was still seeking information from the Respondent some months later, as is demonstrated by the copies of emails sent by Mr Jagpal to the Tribunal in defence of the application for costs. The Respondent did not comply with those orders to immediately change the way it paid the Claimant. Instead, they continued to pay the Claimant in accordance some codes but with a 40% reduction, up until his resignation from the Respondent’s employment in October 2016.[28]The Respondent failed to restore the clauses in the Claimant’s contract and failed to pay him for toolbox talks, abortive calls or in accordance with the correct codes up the date that the Claimant left his employment with the Respondent and despite the successful liability Hearing in April 2016.[29]In preparing his schedule of loss for the Remedy Hearing, in addition to an agreement on the correct codes to be applied to his work, the Claimant needed information from the Respondent on the number of toolbox talks between the date of his TUPE transfer in 2011 and his claim so that he could calculate the amount he should have been paid for attendances as part of his remedy. He also needed information from the Respondent on the abortive calls and the occasions when he was entitled to be paid material costs. Without that information the Claimant could not have calculated his remedy.[30]In emails sent in May and June 2016 those representing the Respondent did send some information with regard to toolbox talks and training to the Claimant to assist him in calculating his remedy.[31]On 30 June 2016 the Respondent wrote to the Claimant solicitors and the Tribunal proposing that the remedy hearing set for 11 July be postponed. The Claimant had not yet finalised his Schedule of loss. Mr Jagpal expressed sympathy for the Claimant’s solicitors in the process of calculating the Claimant’s schedule of loss. He stated that the Respondent did not at this stage criticise the Claimant for the delay and that it appreciated that recalculating his salary over a period of some 4-5 years would be a time-consuming exercise particularly in view of the number of documents that would need to be considered. The Respondent also envisaged that it would be a time-consuming process for it to prepare a counter schedule over the same period. The Claimant opposed this application for postponement but sought the unusual step of requesting that the 1 July be used instead for a case management discussion in relation to a remedies hearing - given the volume of paperwork involved and the difficulty in getting an agreement on the codes that should be applied and in calculating the Claimant’s losses.[32]The main question in preparation for the remedy Hearing was which set of codes were the ones that had been used to pay the Claimant when he was employed by Kier. Was it the ones that the Claimant put in the original bundle of documents, was it the set the Respondent sent to the Claimant and the Tribunal on the second day of the liability Hearing or was it something else. During the course of this litigation, the Respondent has produced three different documents which it stated was the document that had been attached to the email sent to it by Kier in August 2010. That was discussed in the paragraphs 11 and 29 of the Remedy judgment and reasons document. The Tribunal has no confidence that the Respondent has been transparent in this regard.[33]A set of codes were forwarded by the Respondent to the Tribunal on the second day of the liability Hearing in April 2016. The Respondent’s case was that those were the codes that had been sent to it by Kier in August 2010. Between the liability Hearing and the first listed remedy hearing on 11 July, Mr Prouten sent an email to the Claimant with an entirely different set of codes attached which he stated were the correct codes that needed to be applied to the Claimant’s work following the Tribunal’s judgment. It is likely that this is what prompted the Claimant’s solicitors to request that the hearing on 11 July be turned into a case management discussion so that he could seek orders for disclosure in relation to the codes. Orders were made and subsequently, the Tribunal made an order to assist the Claimant to try to obtain information from Kier to assist.[34]At the remedy hearing on 9 March 2017, the Respondent produced in their bundle of documents, a totally different document which they stated was the correct document setting out the codes that should be applied to the Claimant’s contract and to calculate his remedy. The Tribunal found this to be the Respondent’s attempt to mislead the Tribunal and the Claimant. The Respondent’s evidence has been unreliable in relation to the identity of the actual document sent to it by Kier and attached to the email of 5 August 2010.[35]By contrast, the Claimant has consistently relied on the documents that were produced from page 170 of the original bundle of documents as being the codes that applied to his work and which he stated in evidence had been given to him by manager before he left. The Respondent disputed that those were the applicable codes and because of that dispute, there were two abortive remedy hearings to try and independently ascertain what the applicable codes were. Unfortunately, the enquiries of Kier, revealed that they no longer had the codes available. They provided payslips which were of limited assistance to the Tribunal.[36]The Respondent appeared to also attempt to mislead the Tribunal in respect of the Claimant’s claim for payment for toolbox talks and training in accordance with the express term in his Kier contract. Having clearly stated at the liability Hearing that the Respondent does not pay for toolbox talks and training, Mr Prouten gave different evidence at the remedy Hearing. He stated that the Respondent had already paid the Claimant for toolbox talks and training and that those items did not need to be included in his remedy.[37]The Tribunal sought to ensure that it calculated the Claimant’s remedy on the correct codes applicable to his contract with Kier which transferred under TUPE to the Respondent.[38]In the end, the Tribunal’s judgment was that, in contrast to the Respondent, the Claimant had been consistent in his reliance on the codes that he produced in the bundle of documents for the liability Hearing and that those were most likely to be the correct codes. The Claimant’s remedy was calculated in accordance with those codes. Applying law to facts[39]It is this Tribunal’s judgement that the response in this case had no reasonable prospect of success. The Respondent knew, having investigated the Claimant’s grievance and found the email of 5 August 2010 and the documents attached; (if it had not already been aware), that the Claimant was not being paid in accordance with the terms of his contract that had been in operation when he was employed by Kier and which should still apply following his transfer to its employment. This was well before the Claimant issued his claim in the employment tribunal.[40]The Respondent’s defence was never that the TUPE Regulations did not apply. It was not the Respondent’s defence that it had a valid reason for not complying with the terms and conditions of the Claimant’s contract with Kier. Also, it was never the Respondent’s case that it had paid the Claimant for training days, toolbox talks or aborted calls; in accordance with his contract. As such, the Respondent did not have any reasonable prospect of succeeding in its defence to this claim.[41]In addition, the Respondent has relied on three versions of a document in its defence of the amounts the Claimant sought as his remedy. The Claimant and the Tribunal had to seek disclosure from Kier, which was not forthcoming because of the time that has elapsed since the Claimant left Kier. All of this could be avoided if the Respondent had paid the Claimant in accordance with the original documentation, either when he transferred in August 2010 or when Mr Watts discovered the attachment to the email when he was considering the Claimant’s grievance or in response to the liability judgment in April 2016.[42]In relation to the Respondent’s position that it is the Claimant’s fault that the remedy hearing did not go ahead on 11 July or 23 September, it is this Tribunal’s judgement that those dates were not effective because although the Respondent did provide some information by email to the Claimant, it failed to disclose the codes that it had received from Kier or because having done so in April 2016 at the liability Hearing, it sought to obfuscate matters by producing another set of codes in June 2016. Another set was produced in March 2017 at the effective remedy Hearing. It was because of the lack of transparency from the Respondent that the Tribunal authorised the Claimant to seek detailed information from Kier to assist in calculating the remedy due to the Claimant.[43]Because of the lack of transparency on the part of the Respondent and the difficulty in obtaining information it was not unreasonable of the Claimant to ask the Tribunal to conduct a preliminary hearing on 11 July to make directions for the collation of evidence in this case. It is likely that the request for the hearing to be turned into a preliminary hearing came after Mr Prouten sent the Claimant the second, different sent of codes. The discussion at that preliminary hearing was helpful in clarifying further issues between the parties and working out what was required.[44]Addressing the four points of reference which make up the Claimant’s application for costs, it is this Tribunal’s judgment that the additional costs incurred in correspondence with the Respondent in relation to the relevant codes, the application for specific disclosure against Kier and attendance at the hearings in July and September would on balance not have been required had the Respondent produced the correct codes in April or at some point before the original listing of the remedy Hearing on 11 July 2016. The Respondent conducted its case unreasonably in failing to do so. The Respondent could have agreed that the codes produced by the Claimant in the beginning of these proceedings and which had been emailed by the Claimant to the Respondent before the Claim was issued, were in fact the correct ones. Had the Respondent agreed that it had not paid the Claimant in accordance with his contract as far as the toolbox talks, training and aborted calls were concerned, then those figures could have been agreed. As those were still in dispute, the Claimant then had to request disclosure from the Respondent in relation to the amount of money owed to him under those headings. The Respondent’s counter schedule was unhelpful and misleading and did not assist the Tribunal because it had attempted to show that the Claimant had been paid for toolbox talks, training and aborted calls when it had always been the Respondent’s case in this litigation that it does not pay for those items.[45]Taking into account the principle discussed in the case of Daleside Nursing Home set out above, it is this Tribunal’s judgement that the Respondent conducted its defence of the remedy claim in an unreasonable manner. It has attempted to obfuscate matters by producing 3 different versions of the applicable codes and by claiming that it had paid for matters that had stated earlier in the litigation that it did not pay. It is this Tribunal’s judgment that the Respondent should pay the Claimant’s additional costs incurred in seeking his remedy. The Claimant has not sought all his costs but only those incurred because of the lack of transparency and the obfuscation by the Respondent.[46]Therefore in accordance with the case of Power v Panasonic UK Ltd, in relation to the first part of the exercise, the Tribunal finds that the Respondent has acted unreasonably in its defence of the Claimant’s remedy claim.[47]The Tribunal now turns its attention to the second part of the test in which it has to ask itself whether it is appropriate to exercise its discretion by awarding costs against the Respondent.[48]The Respondent is a public limited company. The Respondent has not sought to make a case that it would be financially difficult for it to comply with an order for costs in this case.[49]The Claimant is seeking an order for costs in total of £5,817. That is made up by the Claimant’s solicitor’s time in applying for an order for specific disclosure, instructing Counsel and for the remedy hearing. In addition, costs have been claimed in relation to attendances on Counsel in conference and Counsel’s attendances at the hearings in July and September 2016 as well as 9 March 2017. The Claimant is only claiming the cost in relation to the remedy. The Claimant’s costs schedule does not include any costs in relation to the liability hearing in April in which Miss Millen, his counsel, also attended. The solicitor’s costs claimed are unlikely to be all costs the Claimant incurred in preparing for the remedy hearing.[50]It is this Tribunal’s judgement that the costs claimed have been incurred reasonably and that the amounts quoted are also reasonable, appropriate and proportionate in the circumstances. This was a complicated matter and the Claimant needed assistance from solicitor and from experienced counsel to present his case and to pursue his remedy. The Claimant’s case was not simply that he had not been paid his wages. His remedy needed to be calculated specifically in relation to codes for each particular job, as well as the amounts due to him for toolbox training and abortive jobs. Because the added complication that the Respondent defended the remedy claim by trying to confuse the Claimant and the Tribunal over which codes were applicable by producing three sets of codes over the course of the litigation, by changing its position on the payments due to the Claimant for toolbox talks and other training and other matters; the Claimant had to incur additional costs in pursuing his remedy and attending/preparing for additional hearings necessary to do so. For those reasons it was appropriate to have experienced counsel and solicitor acting for him in that regard.[51]In the circumstances the Tribunal’s judgment is to award the Claimant’s costs in full of £5,817. This is a total of solicitor’s costs of £2,667 and counsel’s fees which came to a total of £3,150.[52]The Respondent is ordered to pay the Claimant that sum forthwith.[53]The Claimant has also applied for the Respondent to refund the Issue fee and the Hearing fee which came to a total of £390. Following the judgment in the Supreme Court in the case of R (on the application of UNISON) v Lord Chancellor 2017 UKSC 51 it is appropriate for the Claimant to seek reimbursement of those fees from Her Majesty’s Courts and Tribunals Service (HMCTS) and the Tribunal office will be able to clarify how to make such a claim, if such clarification is required.[54]The tribunal orders the Respondent to pay the Claimant’s costs in the sum of £5,817.