Miss S Sasheva v All Techmart UK Ltd and Mr A Uddin: 3204710/2021
EMPLOYMENT TRIBUNALS
Case No 3204710/2021
Between
Miss S SashevaClaimantAll Techmart UK Ltd and Mr A UddinRespondent
Before
Employment Judge MoorMr Abel (instructed by solicitor) for claimantNot represented for respondentDate 9 May 2023
JUDGMENT
Under Rule 21 of the Employment Tribunal Rules 2013, no Response having been received by either Respondent, I have determined that on the information in the Grounds of Complaint I can properly determine the following claims. It is the judgment of the Tribunal that:[1]the First and Second Respondent harassed the Claimant contrary to section 40(1)(a) of the Equality Act 2010 by unwanted conduct relating to sex (contrary to section 26(1) of the Act) and by unwanted conduct of a sexual nature (contrary to section 26(2) of the Act; and[2]the First and Second Respondent directly discriminated against the Claimant because of her sex contrary to section 39(2)(c) of the Equality Act 2010 by constructively dismissing her; and[3]the First Respondent is in breach of contract by failing to give one week’s notice of termination.
REASONS
Legal Principles
[1]On 13 December 2021 I made Rule 21 Judgment, a Notice of Appearance not having been entered. The Claimant was harassed because of her sex and/or sexually harassed by the Respondents. There was insufficient information for an assessment of remedy and this hearing was listed.[2]On 11 January 2022 solicitors for the Respondents indicated they would be making applications for time to be extended to present the Notice of Appearance and to reconsider the Judgement. Mr Watson attended today and made applications for this hearing to be postponed pending the Respondents’ applications. They could not be made today because the medical evidence they relied upon was not yet available.[3]For reasons given orally at the hearing I did not allow the application to postpone. I listed a hearing for a Preliminary Hearing in public in front of me on 12 July 2022 at 10.00 for 3 hours to hear the Respondents’ applications. I have made separate Case Management Orders in order that the relevant information is prepared in good time.[4]The Claimant withdrew her holiday pay claim.
Findings of Fact
[5]The Claimant worked as an administrator at the First Respondent starting on 12 October 2020. She was the sole employee.[6]Mr A Uddin, the Second Respondent, was her manager and director of the First Respondent and the only other person working in its office.[7]The Claimant was not provided with any written particulars of employment or a written contract of employment.[8]Mr Uddin stared at her while they worked in the same office, so much so it made her feel uncomfortable.[9]In a text message sent to the Claimant by Mr Uddin on 3 November 2021, he stated ‘I wanna hump you.’ And ‘Love … when are we going to fuck’. She says, and I accept, that she could not have felt more uncomfortable. She was also scared. As a result she began to work at home more.[10]Mr Uddin sent the Claimant other text messages telling her he missed her which made her feel uncomfortable.[11]Mr Uddin sent another text, asking if she was alone, on 7 March 2021. The Claimant then saw him hanging around her flat. This alarmed her and she started fearing for her safety.[12]Later in March 2021, Mr Uddin sent the Claimant another obvious sexual proposition by asking her if she wanted to spend the night with him. The Claimant told him this was unacceptable harassment and told him to stop. Despite this he tried calling her numerous times until she blocked his number.[13]She decided to resign after the second proposition, because of the harassment she experienced. She was, from her texts, plainly upset and angry.[14]The Claimant felt so harassed that she reported the incident to the Police.[15]I have no doubt that at first the harassment made the Claimant initially feel extremely uncomfortable, and nervous. She was too ashamed to seek support from members of her family initially. Most of them lived in Bulgaria and she did not wish to worry them unduly. I have no doubt that by the time she resigned she was scared, extremely upset and angry. She had been forced to leave her job because of unlawful sexual harassment in the form of propositions from her boss and only other member of staff.[16]The Claimant decided to move home because Mr Uddin had her address and she had seen him hanging around her flat. She did not feel safe coming and going. I entirely accept that this decision was caused by the unlawful harassment and was a further aggravating impact upon her. It is practically burdensome to have to move home, to pack, to find somewhere new, to change addresses and so on, but to do so because of harassment is even more upsetting.[17]The Claimant’s aunt provided her with some support at the time. She saw the Claimant change to being irritable and distracted before she could open up about what had happened.[18]The Claimant found a new job, 3 weeks after her resignation. She went onto another job in October 2021.[19]I accept the Claimant now feels nervous around male colleagues because of the harassment she experienced at the hands of the Respondents. She has also experienced a real loss of confidence. She is more easily distracted. This had an impact on her ability to work effectively and at her best. I expect this to ease as she now works in a safe work environment. She also still feels shame about what had happened.[20]The Claimant has regularly had moments when she freezes because of anxiety. She calls these panic attacks and they have happened about 3 times a week since her resignation. They are attributable, in my view, to the harassment. She does not want to talk to anyone at work about why they are happening. She has not sought medical help for them but has used the internet to try to find ways of coping. The Claimant has had nightmares but these have eased. I expect that if she sought professional help about her anxiety, there is a good prospect that it and these attacks will lessen as time goes on.[21]The Claimant does not experience problems around family or friends. Decision on Injury to Feelings Principles:[22]While the Vento bands give guidance on a starting point for the assessment of injury to feelings by reference to the acts found to be discrimination, it is important to remember that I must compensate for injured feelings. I do not punish the Respondents for the treatment. Equally the seriousness of the acts is likely to affect the degree of impact upon the victim.[23]I have had regard to the Judicial College Guidelines on personal injury, especially psychiatric injury (in order to ensure the award I make is commensurate with such awards, not because I am compensating for such injury) and the comparable cases in Harvey. Of course, no two claims are the same and I am not bound by those cases.[24]I take into account the value of money and the principle that awards should not be so high or so low as to reduce public respect for and confidence in the Equality Act.[25]The factors pointing to significant injured feelings are as follows:[26]The behaviour was nasty sexual harassment by Mr Uddin in the form of sexual propositions and standing outside the Claimant’s home. It was an abuse of his power as her employer. In addition the Claimant was made to feel uncomfortable by Mr Uddin staring at her and sending to her inappropriate texts about missing her. Despite the Claimant’s very clear and firm text in which she told the Second Respondent to stop, he continued to try to call her.[27]The Claimant’s response to the harassment can be measured by the fact she reported the conduct to the police, left work and moved home.[28]The impact on the Claimant was increased because she was a lone worker. This exacerbated her discomfort and feelings that she was unsafe. She did not want to be near Mr Uddin.[29]She resigned because of the sexual harassment. Similarly she had to move house. Both these events increased the injury to her feelings: it was significant to have to change two main parts of her life: her job and her home. They also both led to a great deal of practical inconvenience in having to find other work and another home.[30]The Claimant’s injured feelings included shame: a really unpleasant and undermining feeling.[31]The Claimant describes real anxiety and a real loss of confidence that have affected her working life and ability to work effectively. She is understandably nervous working with men. She has regular moments where she freezes. These events are destabilising and really unpleasant, especially as she does not wish to talk about the reason for them. This impact is ongoing but there is a fairly good chance that they will not be long lived if the Claimant seeks professional help. The Claimant has had nightmares but these have eased.[32]The factors pointing to a lower award for injured feelings are as follows:[33]The harassment, while serious, did not include touching and was relatively shortlived taking place in relation to 3 main incidents (two propositions and attendance at her home). (The Claimant had started working more at home to avoid Mr Uddin.)[34]The Claimant has not sought medical help, which may have relieved some of her symptoms of anxiety– but has instead used internet research to try to cope.[35]There has been no impact on her relationships with friends. There was initial shame in first informing family, but no ongoing impact in her relationship with her family. The Claimant has been able to start new work.[37]While the Claimant lost her job this was a new job and the impact on her feelings did not include any significant loss of amenity in that short-lived job, which was quickly replaced.[38]Overall in my judgment the Claimant experienced 3 main incidents of sexual harassment, which was a nasty and serious abuse of power by her boss. Even though relatively short-lived, it has had a real impact upon her working confidence especially around male colleagues. She experiences real anxiety, manifested in regular moments when she freezes. The harassment scared her because she was a lone worker with only him in the office and again when he turned up outside her home. She experienced distress, fear and anxiety, so much so that she reported the matter to the police. Her injured feelings were doubtless increased by having to leave her job and by having to move home.[39]This is not a higher Vento band case because the harassment did not last long; and did not include the worst kinds of physical harassment and there has been and will likely be some future improvement in ongoing impact. But it is not in the lower Vento band because it was not a one-off incident, the injured feelings are real and extend beyond upset and into anxiety and are long lasting and because the harassment resulted in the loss of a job and the need to move home.[40]Starting in the middle band of Vento and taking into account all of the factors I set out above, I assess the Claimant’s loss of earnings for the harassment and constructive dismissal in total at £15,000.[41]The Claimant gross and net week’s pay was £215. She lost three weeks’ net pay amounting to £645.[42]I have considered whether to make an award under Section 38 Employment Act 2002 because the Claimant did not receive a section 1 statement of particulars of employment. As I have made an award in the claim, then the minimum award must be 2 weeks. I exercise the discretion given to me by this section to increase this award to 4 weeks’ pay. It would be just and equitable (fair) to do so because the Claimant was a lone worker and had no one to turn to within the Respondent to ask about her basic rights save Mr Uddin, who was harassing her.[43]I do not make any basic award: this is not an unfair dismissal claim.[44]I do not make any uplift because the ACAS Code on Discipline does not apply because this is not a disciplinary case.[45]I award interest on financial loss at 8% from the midpoint of the date of discrimination (which I take to be the effective date of termination) and the calculation date (25 January 2022).[46]I award interest on injured feelings at 8% for the whole period.[47]I refer to the calculation below for the relevant figures. Appendix 1 Calculationa. A. Financial Loss £ Loss earnings 3 x 215 645 Section 38 award 4 x 215 860 Total financial loss 1505b. B. Interest on financial loss From midpoint 10 March 2021 to 25 January 2022 = 321 days/2 = 161 days 8% x 161/365 = 3.5% x 1505 = 52.67c. C. Injury to Feelings 15000.00d. D. Interest on injury to feelings At 8% for whole period 8 x 321/365 = 7% 7% x 15000 1050.00 Total award A + B + C + D £17,607.67
Findings of Fact
[1]This was a preliminary hearing to decide whether time should be extended to allow the Respondents to present their response.
Facts
[2]Having heard the evidence of the Second Respondent and Mrs Aktar, and having read the documents referred to me at this hearing and the prior remedy hearing, I make the following findings of fact.[3]The Claimant was engaged by the Second Respondent to work in his business, the First Respondent, on 12 October 2020. She left that work in March 2021.[4]The First Respondent was Mr Uddin’s business. It was a subcontractor for an Indian IT business. The First Respondent sold warranties to clients who paid by cheque.[5]The Claimant was engaged to work for the business as an administrator and because Mr Uddin needed help to produce a report that was designed to raise funds. While Mr Uddin has been inconsistent about the nature of the engagement in his draft Response and witness statement, I find he engaged her on a probationary period of 3 months, as he said in his statement under oath.[6]During this period Mr Uddin worked from an office on a pc or a laptop and from time to time at home. In his work he had to deal with banking but he engaged an accountant to do the company accounts.[7]While I have not seen all the documentation in the claim the contemporary texts produced by the Claimant at the Remedy Hearing show evidence of the two main comments made by Mr Uddin that she says were unwanted: Mr Uddin: We will go for dinner tomorrow. Claimant: was it your bday tomorrow Mr Uddin: Yes Love Claimant: Mm, we can have coffee in the morning Mr Uddin: It’s on me because you are beautiful Miss u Y not dinner I have never presented a lady with flowers hence awkwardness I have sent flowers to people but not in person You are the first lady I vanna hummpa lot Love When are we going to f*** Claimant: this is really inappropriate Can you please make sure that my payment is in tomorrow Mr Uddin: you get paid on Thursday Sorry about language Claimant: After you just sent me I am not comfortable to come to work Mr Uddin: are you why Cliamant: Are you serious, I can’t believe you said that! Mr Uddin: No Not serious Forgive me Claimant: Do not ever dare to talk to me like that, and from now on do not text me out of my working ours if is not work related! Mr Uddin: Okay Sorry [repeated 4 times] I am extremely sorry Claimant: Let me be very clear, what you have said to me was horrible, and I want to keep my job, but if something like this happened again, I have to take a further action! Mr Uddin: Yes I want you to work for me too Your very talented In later texts Mr Uddin says: My friend has a place in Essex He said I can go and visit over night. Hello Sasha One evening Claimant: Good for you Mr Uddin: Us Claimant: Are you sick What’s wrong with you Mr Uddin: No I am not sick ….SASHA what do you mean Hello Claimant: Do u think this is appropriate? Mr Uddin: OK let’s keep it clean from now on ok No personal stuff Claimant: No, you crossed all possible lines [she sends a screen shot of earlier comment] Is this acceptable Mr Uddin: I said sorry Claimant: I can do nothing with I am sorry At this point this is pass all limits, and only one thing I can think is to report it This is sexual harassment and it makes me feel very uncomfortable. Mr Uddin: it’s up to you what you want to do The texts then continue with the Claimant complaining and telling Mr Uddin to stop harassing her.[8]Shortly after this last exchange the Claimant left her job.[9]In the draft response and/or his statement for this hearing Mr Uddin contends that on her first day of work the Claimant suggested they have sex. He alleges he replied, ‘How dare you say that to me’. A few days later on 15 October he alleges she stated on a visit to the Council ‘What’s it going to take for you to sleep with me?’ He alleges he found this distressing and told her it amounted to sexual harassment. He alleges the Claimant talked ‘dirty’ in the office and that sort of sexually inappropriate behaviour continued throughout her engagement. He alleges the claim is a money-making enterprise by the Claimant. He contends the ‘I vanna humpalot’ comment was a reference to a character in the film Austin Powers and the Spy Who Shagged Me and effectively part of a joke because the Claimant liked Donald Trump whose wife (he says) was called Ivana. He regrets sending the second message but was in response to the Claimant’s previous suggestions of sex. He says he was married and did not mean the remarks seriously and did not want to have sex with the Claimant. He argues none of the comments or behaviour could have been harassing in that context because the Claimant had instigated the discussion about sex and made repeated sexually inappropriate comments. He contends on her last day she tried to kiss him.[10]In answering questions today Mr Uddin gave a number of differing explanations as to why he did not dismiss the Claimant after her alleged sexual remarks so early in the engagement that he says he found harassing at the time. First, that she had no contract so how could he terminate her employment. When it was pointed out to him that he himself had stated he had hired her on a 3 month probationary period, he stated needed her help and wanted to give her a chance. He did also in his evidence acknowledge that he could have told her to go away but said she would not have done so.[11]As part of this hearing, I do not decide the truth of the allegations or the draft response. I do consider however the passages of texts I have been provided with are full passages rather than edited. I accept, however, they may not be all the texts that passed between the parties. I do also consider that Mr Uddin’s evidence that the Claimant made sexual advances towards him that he found harassing while she was on probation seems implausible both because he could have just stopped the probation there and then and stopped such harassment; and also importantly because the contemporary documents - the lengthy to and fro texts - I have quoted above do not suggest that the Claimant had been herself making any sexual advance or using inappropriate sexual language or talking dirty: to the contrary, she immediately objected to his advances, and avoided any comment on his remarks that she was beautiful etc. Nor did he say words to the effect – I don’t understand your objections now, it was you who started this. The comments he made that he had sent flowers and that she was beautiful suggest clearly he was making advances and those comments are completely inconsistent with his defence that he felt harassed by her alleged earlier advances.[12]As part of her claim, the Claimant also raised matters not capable of being recorded: that Mr Uddin stared at her so as to make her uncomfortable and was seen hanging outside her apartment. These matters are disputed by Mr Uddin.[13]ACAS early conciliation started on 1 April 2021 and ended on 13 May 2021. Mr Uddin remembers speaking to the ACAS conciliator and understanding that the Claimant might bring a claim. He contends the ACAS conciliator advised him that the Claimant would go for a default judgment but then it could be reviewed. In my judgment, Mr Uddin is mistaken about this. No ACAS conciliator would anticipate whether a default judgement would be made. This is because the early conciliation period happens at a stage when it is not necessarily clear that a claim will be made at all. At around the time of speaking to ACAS, Mr Uddin spoke to Bindman’s solicitors who advised him to come back if anything further happened.[14]The claimant was presented a claim on 11 June 2021 claiming that she had been unlawfully harassed by Mr Uddin because of conduct relating to sex and conduct of a sexual nature. She claimed this was direct sex discrimination and also claimed notice pay for having to resign because of the conduct.[15]Mr Uddin remembers that he received a copy of the Notice of the Claim in the post at his home address. It was sent on 12 July 2021. However, at this time, from about the end of June until 21 July 2021 he was experiencing a psychotic episode. He was during this period not able to deal with the claim.[16]He has paranoid schizophrenia. His condition had been well-managed by medication until this point. He had only two admissions in 1983 and 2012. On 30 June 2021 Mrs Aktar, Mr Uddin’s wife, called the crisis line as he had become more delusional. They attended the crisis house for assessment. It was recommended he was sectioned but Mrs Aktar wanted to manage him at home. He was therefore put under the care of the Home Treatment Team. On 2 July 2021 he saw Dr Bhattacharya, consultant psychiatrist, and was very unwell being delusional and including likely having auditory hallucinations. His medication was changed to add Haloperidol. The Home Treatment Team supervised medication with his wife during this period. The discharge sheet records that ‘There was gradual improvement of his mental state and this was corroborated by his wife. … Discharge was planned and agreed with him and he was stable at discharge and denied any risks.’[17]Dr Raham provided his solicitors with a letter dated 15 May 2022. She stated ‘Mr Uddin appeared stable in his mental health following his discharge from HTT until his trip to Bangladesh. Due to the chronic nature of his condition, there is unlikely to have [been] full remission.’ She could not comment on his ability to conduct his affairs.[18]Mr Uddin states that the new medication made him feel drowsy during the day. He denied he slept during the day when I asked him expressly. Mrs Aktar’s evidence is that he slept all day since the medication change (apart from a point 2/3 months after the episode when she stopped the medication). What do I decide about this difference in their evidence? It seems to me the truth is most likely to lie somewhere in the middle: Mr Uddin does not sleep all day every day, but does sleep more often during the day and his medication does make him feel drowsy. Mrs Aktar, as his carer, is doubtless concerned for his welfare and she observes him sleeping, but this is not the same as every day or all the time. I find this to be an exaggeration. I do take into account Mr Uddin’s experience since becoming mentally stable in July 2021 and his description of drowsy is credible.[19]On the basis of the medical evidence and these findings, I find therefore that Mr Uddin was capable of seeking advice and instructing others to act for him shortly after the end of the episode of crisis. While he was drowsy and slept at times, that did not mean he was unable to function to some extent. If not, medical professionals are likely to have been further involved. Further, he was able to act quickly once the Rule 21 Judgment arrived and there is no suggestion that in December Mr Uddin had made a substantially greater recovery than in the months before.[20]Mrs Aktar suggests Mr Uddin is forgetful now. But my finding is that Mr Uddin did not forget about the claim during the period after his crisis to 31 December 2021. I make this finding because he told me clearly that he took the claim into account as part of the reason he decided to stop working after his crisis. The other reason was his health. I find his evidence about what ACAS had advised him to be self-serving: I find it likely during this period that Mr Uddin simply decided not to deal with the claim rather than forgetting about it. Mr Uddin knew how to contact solicitors. He also had an accountant. In my judgment he chose not to refer the matter to them, until he was forced to do so by the Rule 21 Judgment.[21]The Rule 21 Judgment was sent to the parties on 21 December 2021. Mr Uddin likely received it on 22-23 December 2021. He contacted Bindmans who suggested he look locally for a solicitor because the person he had originally spoken to had moved. He then found Brit solicitors and instructed them on 31 December 2021 before he left for Bangladesh.[22]Mr Uddin and his wife went to Bangladesh from 31 December 2021 until about 28 January 2022. They had to isolate for 14 days or so before the flight but that did not stop Mr Uddin from making telephone and email enquiries of solicitors: that much is obvious from his contact with Brit solicitors on 31 December 2021.[23]It took Brit solicitors until 11 January 2022 to make the application to extend time. There is no reason for this extra delay after the working year started on 4 January 2022. They relied in the main on the need for the Claimant to have extensive time to recover from his crisis in July 2021.
Legal Principles
[24]Rule 20 allows for applications for extensions of time for presenting a response. They must be presented in writing, setting out the reason why the extension is sought. Where time has expired, the application must be accompanied by a draft of the response.[25]Rule 20(4) provides that if the decision is to allow an extension, any judgment issued under Rule 21 shall be set aside.[26]The parties agree that I must apply the Overriding Objective to act fairly in considering this application and must consider the factors set out in the leading case Kwik Save Stores Ltd v Swain and others [1997] ICR 49: the reason for the delay; the merits; the balance of hardship. The case reminds me that I must decide what weight to give each factor.[27]As to the reasons for delay, in Kwik Save Mummery J (as he then was) reaffirmed the importance of meeting time limits, laid down as a matter of law. This is particularly so in employment tribunals, which were established to provide a quick, cheap and effective means of resolving employment disputes. Failure to comply with the rules causes inconvenience, results in delay and increased costs. It can also indicate an unacceptable attitude to the system. Thus an explanation for the delay is an important factor. ‘The Tribunal is entitled to take into account the nature of the explanation and to form a view about it. … In general, the more serious the delay, the more important it is for an applicant to provide a satisfactory explanation which is full as well as honest.’[28]As to the balance of hardship, Mummery J explained: ‘An important part of exercising this discretion is to ask these questions: what prejudice will the application for an extension of time suffer if the extension is refused? What prejudice will the other party suffer if the extension is granted? If the likely prejudice to the applicant outweighs the likely prejudice to the other party, then that is a factor in favour of granting the extension of time, but it is not always decisive. There may be countervailing factors. It is this process of judgment that often renders the exercise of a discretion more difficult than the process of finding facts in dispute and applying them to a rule of law not tempered by discretion.’[29]Finally the merits is a factor. Mummery J explained: ‘If a defence is shown to have some merit in it, justice will often favour the granting of an extension fo time, since otherwise there will never be a full hearing of the claim on the merits… the Tribunal will only hear one side of the case. It will decide it without hearing the other side. The result may be that an applicant wins a case and obtains remedies to which he would not be entitled if the other side had been heard. The respondent may be held liable for a wrong which he has not committed. This does not mean that a party has a right to an extension of time on the basis that, if he is not granted one, he will be unjustly denied a hearing. The applicant for an extension of time has only a reasonable expectation that the discretion relating to extensions of time will be exercised in a fair, reasonable and principled manner. That will involve some consideration of the merits of his case…’ The court must form a ‘provisional view about the possible outcome of the case’.[30]The Alpine Bulk case referred to in Kwik Save concerned a defendant that had deliberately decided not to defend the claim. There the court had to ask whether they had ‘a real prospect of success in defending the case’. Application of Facts and Law to Issue Explanation for the delay[31]I have not found the explanation for the delay to be full for the following reasons.[32]I fully accept and understand that Mr Uddin has paranoid schizophrenia, a chronic (meaning long-term) condition. It was well-managed until July 2021. I also understand and accept that during July 2021 he could not have dealt with the claim because he was experiencing a psychotic episode and was under the care of the crisis team at home, otherwise he would have been sectioned.[33]Nevertheless the medical evidence is that Mr Uddin was stable after discharge. While I have accepted the new medication made him drowsy during the day and on occasion that he slept during the day, he did not do so all day every day. There is no evidence that his functioning suddenly improved in December when he was able to instruct solicitors.[34]I have found that that Mr Uddin did not forget about the claim after July: it was a factor in his mind when he decided not to continue running his business after his crisis.[35]While therefore there is explanation for the initial delay, there is not a satisfactory explanation for the full delay. It is significant – 5 months - and Mr Uddin had not forgotten about the claim.[36]However the lack of a fully satisfactory explanation is not the only factor and I must also consider the merits and the balance of hardship. Merits[37]I am encouraged not to undertake a mini-trial. On the other hand, the merits are a factor and I should consider whether I can reach a provisional view of the prospects of success of the response.[38]I am afraid that I do not consider the defence has real prospects of success. This is a case where the contemporaneous texts I have seen will make it difficult for the Respondents’ defence to succeed. The texts themselves are evidence of the most significant allegations (Mr Uddin stating he wanted to f*** the claimant and him asking her to spend the night with him in Essex). They are also evidence of how she, at the time, responded – by telling him to stop and with disgust. These texts are full interactions and not selective. I accept there may have been other interactions by text but this is not a case in which only partial textual evidence of the key interactions has been disclosed. In relation to those interactions, it is clear from the evidence that it is Mr Uddin who sexually propositioned the Claimant, not the other way around. It is also clear that there is no sense in which there is a shared sexual dialogue or jokey sexual talk: the Claimant immediately objected to his language and called it harassment.[39]While of course I cannot anticipate the oral evidence fully, in my view, forensically it will be very difficult for Mr Uddin to persuade a Tribunal that, given the Claimant’s reactions, before these texts there had been shared sexual talk or that the other behaviour she accuses him of did not occur.[40]Furthermore it is surprising that, if the Claimant had sexually propositioned Mr Uddin in the way he suggests on the first few days of her appointment and that if he felt harassed by her conduct as he alleges, he did not simply terminate her probationary period immediately. His explanations for not doing so orally varied and were not credible: he engaged her, he could disengage her. In the light of this it is unlikely he will persuade a Tribunal that it was the Claimant who made advances.[41]Mr Watson did not raise the issue of ‘status’ in his submissions, with good reason. Mr Uddin has been inconsistent on whether he says the Claimant was employed or an independent contractor. In his evidence under oath he says he hired her on a probationary period: that looks very like employment. There is no doubt that she was engaged to do personal work. On this issue of status, therefore, I also consider any argument that she was not an employee does not have real prospects of success, particularly under the Equality Act where ‘employee’ is akin to ‘worker’: someone engaged on a contract to do work personally. Balance of Prejudice[42]What will the Claimant lose if the Respondents’ application is successful? I tend to agree with Mr Watson that she is left in the position most litigants are in: that she must pursue her claim to a fully defended hearing.[43]Will the Claimant suffer any prejudice? I agree with Mr Watson that there is no specific prejudice here. There is no submission that the passage of time has affected memory or the existence of documents.[44]But the Claimant’s solicitors have been put to extra cost if the application is successful. It does not seem to me I can take these into account: costs do not normally follow the event in the Tribunal, though there is some prospect of the Claimant making an application for the costs of dealing with this application (as opposed to the future cost of the trail) under Rule 76.[45]Plainly, however, the Claimant suffers the general prejudice of the delay in her claim being resolved. Litigation is stressful for all concerned and delay exacerbates it.[46]What about the Respondents? They obviously suffer the prejudice of not being able to pursue fully their defence, but I have already decided that this is a limited hardship given that the defence does not have real prospects of success. Assessment of factors overall How then to weigh the factors?[48]First the Respondents have not provided a sufficient explanation for the full delay; while initially the Second Respondent could not deal with the claim because of his crisis, later, his mental health having stabilised he had not forgotten about the claim; he delayed responding until receiving the default judgment, but was then able to act quickly to obtain advice. While he was drowsy from medication this did not stop him from doing so and he was not asleep all day every day in the relevant period. The delay is lengthy just over 5 months (from 9 August 2021, the date the response had to be presented, to 11 January 2022 when his solicitors wrote to the Tribunal).[49]Second, the Claimant suffers little prejudice in the application being allowed, though I have taken into account the delay in resolution of her claim.[50]Third, the Respondents suffer the prejudice in not being able to present their defence but this is not so weighty here, because they do not have a real prospect of successfully defending the claims.[51]I am conscious that generally justice expects that a claim and a defence should be fully litigated, despite procedural default. I have therefore looked at the relevant factors carefully. Overall I consider the weight of those against the application is greater than the weight of those in favour. The lengthy delay for which there is not a sufficient explanation and the limited prospects of success in the defence in my judgment mean the application should not be allowed. I do not consider either factor (delay and merits) decisive on its own but taken together they outweigh the fact that the Claimant would suffer only limited hardship in the application being allowed.[1]The Second Respondent acted unreasonably in applying to extend time to present a response.[2]The Second Respondent is ordered to pay to the Claimant £2,219.40 in respect of costs.[3]No award of costs is made against the First Respondent.[1]The Claimant applies for an order that the Respondents pay the costs of pursuing her claim. Procedural History[2]On 11 June 2021 the Claimant presented an ET1 for sexual harassment, direct sex discrimination and notice pay after a period of ACAS Early Conciliation from 1 April to 13 May 2021.[3]Notice of claim was sent to the Respondents on 12 July 2021. They were required to send a response 21 days later. They did not do so.[4]In the absence of any response, a Default Judgment was made on 9 December 2021 and sent to the parties on 21 December 2021. It found that the Respondents had harassed the claimant sexually; had constructively dismissed her which was direct sex discrimination and owed her 1 week’s notice pay. There was insufficient information on the claim form for the assessment of remedy therefore a remedy hearing was listed.[5]At a remedy hearing on 17 January 2022, I awarded the Claimant £17,607.67 in compensation.[6]On 11 January 2021 (6 days before the remedy hearing) the Respondents made an application to reconsider the Default Judgment and extend time to present a response. I did not allow a postponement of the remedy hearing. The Respondent did not have the evidence, at that time, that they required to pursue their application, so I listed a hearing for 12 July 2022.[7]At the hearing in July, I refused the Respondents an extension of time to serve their Response. My reasons are set out in the Judgment sent to the parties on 12 July 2022. In essence I considered there was no good reason for the much of the delay; and that the defence had no real prospect of success given that it was inconsistent with the texts passing between the parties.[8]On 3 August 2022, the Claimant’s solicitor made an application for costs. It has not been possible to determine it until today for the reasons I deal with later.[9]The Claimant and her solicitors agreed her liability as to their costs under a Damages Based Agreement (‘DBA’) sometimes called a ‘no win no fee’ agreement. The DBA provides at clause 3 that ‘You enter this agreement with us for the pursuit of your employment tribunal claims arising out of your employment with the First Respondent (your claims)’[10]The DBA requires the Claimant to pay her solicitors 35% of her winnings when received, clause 11.1 provides as follows: If you win, you agree to pay us a share of 35% of any money… received. This includes VAT but does not include the expenses that you are responsible for… The reason for setting our payment at 35% is in having regard to the level of risk involved with your case, and level of costs likely to be incurred we believe this is a fair percentage given the commercial risk to Oakwood solicitors Ltd[11]Clause 9.1 of the DBA deals expressly with who benefits if the Tribunal awards costs. It states: If the tribunal awards costs against All Techmart Ltd(a) You agree for those costs to be paid direct to us and if [the First Respondent] to pay us direct [sic] to pay us those costs on receipt as they will be awarded on the basis of the work that we have done on your behalf; and(b) for the purpose of recovering such costs from the First Respondent all costs will be the amount ordered by the tribunal or calculated in accordance with any tribunal order or direction. If the award includes payment of expenses that you are responsible for, as long as we receive payment from the first respondent these will be paid to you if you have already paid them or not charge to you if you are yet to pay them. (my emphasis) Submissions[12]The Claimant argues the Respondent (she does not say which one): 12.1. acted unreasonably and vexatiously in disputing that the Second Respondent had sexually harassed her; 12.2. acted unreasonably and vexatiously in accusing her of harassing the Second Respondent; 12.3. acted unreasonably and disruptively by failing to submit the ET3 form for over 7 months without sufficient reason; 12.4. acted unreasonably and disruptively by submitting a response with no real prospects of success; 12.5. acted unreasonably and vexatiously and disruptively by continuing with the response and application to reconsider the default judgment sent on 28 January 2022 (ordering the Respondents to pay the sum of £17, 607.67) after the Claimant made an offer to settle of £17,000 on 31 March 2022. This offer was made without prejudice save as to costs and warned the Respondents that the Claimant would seek costs if they were subsequently unsuccessful.[13]The Claimant’s solicitor complains about the time taken to decide her application. The Tribunal has attended to the application as quickly as it attends to such applications generally. The Claimant’s solicitor has been responsible for the delay by: 13.1. not sending the application in writing by post to the Respondents when they knew they were no longer represented by solicitors, until the Tribunal required them to do so. It was plainly insufficient for them to say they could not do so because they did not have an email address. Nor was it appropriate to rely on what the Respondents’ solicitors, then no longer on the record, had told them; 13.2. not providing the Tribunal and the Respondents with the Damages Based Agreement (‘DBA’) referred to in their application, when it was clearly a relevant document; 13.3. deliberately deciding not to send the Damages Based Agreement to the Respondents once the Tribunal had ordered it to be disclosed. This was not an error by solicitors but an express decision which had to be reversed by the tribunal. A copy of the DBA was sent on 25 April 2023 and the matter referred to me on 5 May 2023. Had the Claimant’s solicitor sent the application and the DBA to the postal address that it had for the Respondents in the first place, then I would have been able to decide this application long ago.[14]At paragraph 57 of the costs application it is stated ‘The Claimant would also assert any costs awarded by the tribunal will be deducted from the costs owed by the claimant under the DBA to ensure the claimant’s recovery for the claim is as reasonable and proportionate as possible.’[15]The Second Respondent wrote to the Tribunal arguing that the costs application was out of time. This was not the case and I directed that he be informed of this and given another chance to respond. He has not done so.
Legal Principles
[16]Rule 76 provides that: A tribunal may make a custom order and shall consider whether to do so where it considers that (a) a party has acted… Unreasonably… In the way that the proceedings (or part) have been conducted. ‘Unreasonably’ is given its natural meaning. I should bear in mind the context, and not hold litigants in person to the same standards as a professional representative. ‘Vexatiously’ means something very different and goes to conduct that is essentially an abuse of process.[17]Rule 74 provides that no order shall be made unless the paying party has had a reasonable opportunity to make representations in response to the application.[18]Rule 75 states that an order for costs is ‘an order that a party (the paying party) make a payment to (a) another party (‘the receiving party’) in respect of the costs that the receiving party has incurred while legally represented.’ (my emphasis)[19]Where there has been a DBA, whether the Tribunal can still make a costs order will depend on the wording of the agreement. 19.1. If the DBA provides that any costs recovered from the respondent will be set off against the contingency fee payable to the representative, so that it is the claimant and not the representative who will benefit from a costs order, there will be no bar to their making an application under Rule 76(1). They will be 'the receiving party' (i.e. 'another party' to whom the payment of costs will be made: see Rule 75(1)(a)), and they will be the person who will be compensated. 19.2. Conversely, if the DBA stipulates that any costs recovered from the respondent must be paid to the representative on top of the contingency fee, so that it is the representative and not the claimant who will benefit from the costs order, then this will bring the case outside the scope of Rule 75(1)(a) because the representative cannot be 'the receiving party' within the meaning of the rule and the tribunal will have no power to make an order. These points were considered in Barry v University of Wales Trinity St David Case No.1603120/2013 ET.[20]Rule 84 provides that I may have regard to the paying party’s ability to pay: In deciding whether to make a costs … order, and if so in what amount, the Tribunal may have regard to the paying party's … ability to pay.[21]Thus, if I consider there has been unreasonable conduct, I may make a costs order but I do not have to do so. I must consider whether to exercise the discretion to do so. In doing so, I may take into account a party’s ability to pay. Further, in considering the amount of any award I may consider a party’s ability to pay. If I do not take it into account, I should explain why.[22]I bear in mind the principle set out In Gee -v- Shell UK Limited [2003] IRLR 82. Sedley LJ said: It is nevertheless a very important feature of the employment jurisdiction that it is designed to be accessible to ordinary people without the need of lawyers and that in sharp distinction from ordinary litigation in the United Kingdom losing does not ordinarily mean paying the other side’s costs. This principle applies as much to respondents as to claimants.[23]There is no ‘Calderbank principle’ in the employment Tribunal, but I can take into account an offer to settle without prejudice to costs in considering the conduct of the Respondents.
Analysis
[24]The first question for me is whether I have the power to award the costs sought under Rule 75(1)(a). Are they costs that ‘another party’, the Claimant, has incurred while legally represented? 24.1. The Claimant is liable to pay her solicitor 35% of her winnings received, clause 11 of the DBA. Thus, she must pay her solicitor £6,162.68 if she receives the full award. This payment is not expressly described as costs but is explained as the value of the commercial risk in the solicitor working on the case. In my judgment this means the amount of costs the solicitor requires to be paid on success, bearing in mind the risks. 24.2. If I order the First Respondent to pay an amount of costs to the Claimant, under clause 9.1(a) the Claimant must pay them to her solicitor. Clause 9.1(b) makes it clear that the only clawback the Claimant can make is in respect of expenses (like counsel’s fees), which are not relevant here. 24.3. My analysis of the contractual position between the Claimant and her solicitors is therefore that she is obliged to make both payments: the 35% of her winnings to her solicitor and any costs award the Tribunal makes against the First Respondent in her favour to her solicitor. In other words if I make such a costs award and it is paid to her directly, her solicitors are entitled to sue her under the agreement for the whole of it. 24.4. In my judgment the assertion at paragraph 57 of the application does not make any legal difference to this analysis. This is because it is an assertion by the Claimant not her solicitor. Her solicitor would not be estopped by it in any claim they make against her for any amount I were to award in costs against the First Respondent. They could still sue under the agreement for the whole of any such award. Under the DBA, it is the solicitors who wholly benefit from such a costs order. They are not a ‘party’ and therefore, under Rule 75, I have no power to make a costs award against the First Respondent.[25]I have then asked whether it make a difference that clause 9 of the DBA is made expressly in relation to the First Respondent and not the Second Respondent. Is it open to me to consider the application against the Second Respondent? If I make a costs award against the Second Respondent and it is paid directly to the Claimant, then her solicitors should be unable to sue for it under the express terms of clause 9 of the DBA. But the DBA is expressed as being made for the pursuit of the claims arising out of her employment with the First Respondent and this includes the claim against the Second Respondent. Would this persuade a court to read ‘All Techmart Limited’ in clause 9 as including the Second Respondent? In my judgment this would be unlikely given the precise wording of the clause and the rule that interpretation in the case of ambiguity be against the interest of the party who drafted the agreement (previously called the ‘contra proferentum’ rule).[26]This leaves the question whether the Claimant has incurred any of the costs of the solicitor. She must pay her solicitor £6,162 only if the award has been paid to her. I have no information whether this is the case now, but it had not been paid by the time the costs application was made. In my judgment, I can find that this amount represents costs incurred by the solicitor in pursuing the claim on her behalf, even if it is not expressed entirely in this way in the DBA.[27]Thus, I can consider whether to order the Second Respondent to pay, directly to the Claimant, an amount representing the costs she is liable to pay to her solicitor of £6,162 in the event that she receives the original award. This is the limit of my power. Respondents’ Conduct[28]I do not consider that the Second Respondent’s decision not to respond to the claim was an abuse of the Tribunal’s process. I have found that he knew about the claim and took the decision not to respond to it. It is not an abuse not to do so.[29]The Second Respondent’s decision however led to the default judgment. I have concluded that it was then unreasonable conduct of the Second Respondent to apply for an extension of time to present a response, rather than merely make submissions on remedy. I have taken into account the following reasons: 29.1. the Second Respondent had not forgotten about the claim, he was able to seek advice in the period of the delay, he made a decision not to respond to it. 29.2. his purported defence was that the Claimant had allegedly sexually harassed him. This, I judged, was going to be very difficult to make good given the texts I quote in my previous judgment and the implausibility of him not dismissing the Claimant for such alleged conduct during her probationary period; 29.3. and, although a less weighty factor, the early offer by the Claimant to settle for a slightly lower amount than awarded in order to avoid that second hearing.[30]I have considered the countervailing factors: 30.1. that costs do not normally follow the event; 30.2. that the Second Respondent experiences chronic schizophrenia. However I looked at the effect of this condition upon him at the relevant time and concluded he was sufficiently mentally well to deal with the claims. Additionally by the time I am considering the Second Respondent had the benefit of legal representation; 30.3. that generally claims should be determined after a full trial. I took this fully into account at the hearing that decided the Respondents should not be allowed to extend time. Here there seem to be really unusual features: a change of mind; and an attempt to pursue likely uncredible counter-allegations of harassment. Whether to exercise discretion to award costs[31]The unreasonable conduct I have found led to the necessity for a further hearing. It therefore did create the extra costs of preparing for that hearing. I do not take into account the costs of preparing the claim and attending the remedy hearing: they would have been necessary in any event.[32]The Second Respondent has not informed the Tribunal about his ability to pay. The Claimant points out that he was able to afford to travel to Bangladesh with his wife last year and to instruct solicitors and counsel. These facts she suggests show that the Second Respondent has funds available. I note that he told me that he had closed his business. I also take into account that he has chronic schizophrenia, a condition which means his wife is his carer and therefore the household income is likely to be less.[33]Doing my best on this material, I do exercise my discretion in principle to award part of the costs against the Second Respondent but not the whole given what I know of his household circumstances. He has conducted proceedings unreasonably by, far too late, changing his mind and seeking to respond to the claim with a defence that had no real prospect of success. Amount of the Award[34]The unreasonable conduct of the Second Respondent is only in respect of the final hearing: the costs up to and including the remedy hearing would have been incurred in any event. Thus I only award costs incurred after the remedy hearing. I also cannot award costs of any more than the amount the Claimant is liable to pay her solicitor.[35]From the second costs schedule provided, setting out the fees for each fee earner, the costs after the remedy hearing begin on 13 June 2022. Not including preparation of the costs schedule those costs are £1,714.50 plus VAT. I judge that only 20% of the costs schedule preparation should be awarded to reflect that only part of the costs are awarded. This amounts to £135.00 plus VAT. The costs including VAT incurred after the remedy hearing are therefore £1849.50 + 369.90 = £2,219.40.[36]I judge that the Second Respondent is likely to be able to afford this amount, given that as recently as last year he was able to afford to travel long distance and instruct solicitors and counsel. I have taken into account the likely limit on his household income because of his disability.[37]If the Claimant receives the remedy award made by the Tribunal, the Claimant will have to pay her solicitor £6,162.68 in respect of costs.[38]I order the Second Respondent to pay to the Claimant directly £2,219.40 as part of the costs she will incur.