Mr A Ruchaczewski v ISS Facility Services Ltd: 3204843/2022
EMPLOYMENT TRIBUNALS
Case No 3204843/2022
Between
Mr A RuchaczewskiClaimantISS Facility Services LimitedRespondent
Before
Employment Judge Scott
Members
Ms T JansenMr L RylahRepresenting himself for claimantMr Lawrence (instructed by Counsel) for respondentDate 24 October 2024
JUDGMENT
[1]The claimant’s complaints of detriment on the ground of having made a protected disclosure under section 47B of the Employment Rights Act 1996 fail and are dismissed.[2]The claimant’s claim that he was automatically unfairly dismissed by reason of having made a protected disclosure (section 103A of the Employment Rights Act 1996) also fails and is dismissed.[3]The claimant was unfairly dismissed contrary to section 98 of the Employment Rights Act 1996 and his complaint of ‘ordinary’ unfair dismissal thereby succeeds.[4]The compensatory award for unfair dismissal will be reduced by 100%, under s 123(1) ERA 1996 pursuant to the ‘Polkey principle’ (see: Polkey v AE Dayton Services Ltd [1987] UKHL 8). In the alternative, the claimant contributed to his dismissal to the extent of 100% pursuant to s123(6) ERA 1996 and the compensatory award will be reduced by 100%. Case Number: 3204843/2022 2[5]The basic award for unfair dismissal is reduced by 100% under 122(2) ERA 1996 by reason of the claimant’s contributory conduct.[6]The claimant was not wrongfully dismissed, and the claim is dismissed.
REASONS
[1]The claimant brought claims for detriment on the ground of public interest disclosure, automatic unfair dismissal, ordinary unfair dismissal and wrongful dismissal. By an oral judgment, the claimant’s claim of ordinary unfair dismissal was upheld. All other claims were dismissed. No compensation was awarded.[2]The respondent made an application for costs under Sch 1 rules 76 and 77 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. The respondent applies for costs of £20,000. It does not seek detailed assessment. A Schedule of the respondent’s costs is at [105].[3]The respondent’s application is put forward on the sole ground that the claimant’s actions in rejecting settlement was unreasonable behaviour under Rule 76(1)(a).[4]The respondent provided a costs bundle. The Bundle was sent to the claimant on Case Number: 3204843/2022 2 2 October 2024.[5]The respondent relies upon the following documents in the Costs Application Bundle:• C’s schedule of loss dated 27 November 2022 (that schedule did not include any sum for Injury to Feelings or interest) (£21,088) [1-4]• R’s offer of 21 April 2023 (£2,000) [11]• C’s counter-offer to settle (£108,150) made via ACAS on 25 April 2023 [11]• R’s offer (£8,663) made on 11 May 2023 ‘without prejudice save as to costs’. The offer was made on a without admission of liability basis and contained a costs warning. The letter suggested that the claimant may wish to take advice and referred the claimant to the CAB and ACAS. The offer was made again on 23 May 2023 [15-17] The claimant’s attention was drawn to the Kopel case, and a copy of the case was enclosed• R’s offer (£14,750) made on 19 July 2023. The costs warning was repeated [41-42]• C’s counter-offer (£70,000) made on 14 August 2023, which included an injury to feelings award claim of £49,300 (the limit prior to the 2023 increase) and interest [43-49]• R’s ‘final’ offer (£20,000) made on 17 August 2023. Again, the offer was made on a without admission of liability basis [50-51].
Law
[6]The power to award costs is set out in the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013. Under rule 76(1) a tribunal may make a costs 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 ….[7]The tribunal must decide first whether the ‘gateway’ condition is met. The tribunal then decides whether to exercise its discretion to award costs. If so, the tribunal will go on to decide how much to award.[8]The tribunal's power to order costs is more sparingly exercised and is more circumscribed by the tribunal's rules than that of the ordinary courts. There the general rule is that costs follow the event, and the unsuccessful litigant normally has to foot the legal bill for the litigation. In the tribunal, cost orders are the exception rather than the rule. Case Number: 3204843/2022 3[9]The principle applicable in Calderbank v Calderbank [1975] 3 All ER 333, that a party can protect himself against costs in a case involving a money claim by making an offer marked 'without prejudice save as to costs', with the result that a failure by the other side to beat the offer will normally mean that an award of costs will be made against that party—does not apply as such in employment tribunal proceedings. In Kopel v Safeway Stores plc [2003] IRLR 753, the EAT indicated that while refusal of a ‘without prejudice save as to costs’ offer is a factor which a Tribunal can take into account in deciding whether to make a costs order, failure to ‘beat’ such an offer should not, of itself, lead to such an order. Before rejection becomes a relevant factor, a Tribunal must first conclude that the conduct in rejecting the offer was unreasonable. As Mitting J pointed out in Kopel, not only must a true Calderbank offer be accompanied by a payment into court, as to which there is no provision in the tribunal procedure, but (citing Lindsay J in Monaghan v Close Thornton Solicitors EAT/3/01) if the Calderbank principle became widely applied, it would run counter to the whole legislative basis for awarding costs in tribunals. Mitting J stated that the tribunal 'must first conclude that the conduct of an appellant in rejecting the offer was unreasonable before the rejection becomes a relevant factor in the exercise of its discretion under [r 76(1)(a) of the 2013 Rules]' (see too Anderson v Cheltenham & Gloucester plc EAT/0221/13. On the facts of that case, the EAT upheld a tribunal's award of £5,000 costs against the claimant where she had failed in her unfair dismissal and sex discrimination claims and had not only turned down a 'generous' offer to settle the case but had persisted in alleging breaches of the provisions of the Human Rights Convention prohibiting torture and slavery, which the tribunal categorised as 'frankly ludicrous' and 'seriously misconceived'. In the circumstances, the EAT held that the tribunal was entitled to find that the rejection of the offer was unreasonable conduct of the proceedings justifying the award of costs that was made. In Anderson v Cheltenham & Gloucester plc EAT/0221/13 the tribunal failed, when making a costs order, to take into account relevant factors.[10]The Tribunal may have regard to the fact that the party against whom a costs order is sought is a litigant in person. In AQ Ltd v Holden EAT/0021/12, His Honour Judge Richardson stated: ‘The threshold tests in rule 40(3) are the same whether a litigant is or is not professionally represented. The application of those tests, however, must take into account whether a litigant is professionally represented. A tribunal cannot and should not judge a litigant in person by the standards of a professional representative. Lay people are entitled to represent themselves in tribunals and, since legal aid is not available and they will not usually recover costs if they are successful, it is inevitable that many lay people will represent themselves. Justice requires that tribunals do not apply professional standards to such people, who may be involved in legal proceedings for the only time in their life. They are likely to lack the objectivity and knowledge of law and practice brought by a professional legal adviser. Further, even if the threshold tests for an order for costs are met, the tribunal has discretion whether to make an order. This discretion will be exercised having regard to all the circumstances. It is not irrelevant that a lay person may have brought proceedings with little or no access to specialist help and advice. This is not to say that lay people are immune from orders for costs: far from it, as case law makes clear. Some litigants in person are found to have behaved vexatiously or unreasonably even when proper allowance is made for their inexperience and lack of objectivity.’ Case Number: 3204843/2022 4
Conclusion
[11]The claimant succeeded with his ordinary unfair dismissal claim. No compensation was awarded.[12]We take into account that the respondent provided comprehensive cost warnings. And we understand the respondent’s frustration that the claimant rejected an offer close to (although, just less than) the sum that the claimant initially set out in his schedule of loss. But we see nothing unreasonable about the sequence of negotiation. The respondent made, what might be described as, fairly large jumps in the sums offered between April and August 2023. All this might send the message to an unrepresented claimant that the respondent was blustering and that the warnings as to the claimant’s chances of success were not necessarily to be trusted and that they might increase the offer further. Lay people lack objectivity and knowledge of law and practice brought by a professional legal adviser. The claimant had reduced his earlier counter-offer of £108,150 to £70,000 as part of the negotiation. His approach was not in our view unreasonably intransigent (there was no offer by the respondent at any stage to pay for some legal advice, although they did suggest that the claimant might approach the CAB). In the end, on balance, we do not consider that refusal of what turned out to be the respondent’s final offer in this case meets the high threshold of unreasonable behaviour by a litigant in person who in the end succeeded with part of his claim. Refusing the final offer was a misjudgment. It was not, we conclude, conduct outside the range of reasonable responses.[13]The respondent’s application therefore falls at the first hurdle in that the threshold test has not been reached. For this reason, the Respondent’s application for costs is refused.