Mr D Burzotta v Ristorante Cucina Ltd: 3220044/2020
EMPLOYMENT TRIBUNALS
Case No 3220044/2020
Between
Mr D BurzottaClaimantRistorante Cucina LtdRespondent
Before
Employment Judge S KnightDate 5 May 2021
JUDGMENT
[1]The Respondent unfairly dismissed the Claimant.[2]The Respondent is ordered to pay the Claimant £6,888.96.[3]For the purposes of the Employment Protection (Recoupment of Benefits) Regulations 1996:(1) The total monetary award for unfair dismissal is £6,888.96.(2) The prescribed element is £2,568.40.(3) The prescribed element relates to 17 August 2020 to 5 May 2021.[4]The amount by which the total monetary award for unfair dismissal exceeds the prescribed element is £4,120.56. 1 of 4
REASONS
Introduction
[1]Reasons in respect of liability were given orally at the hearing.[2]I now in writing give reasons in respect of remedy.[3]The figures below are also set out in the table at Annex 1.
Remedy
[4]The Claimant is entitled to a Basic Award and a Compensatory Award. Basic Award[5]The Claimant’s gross weekly pay was £452.57. He had worked for the Respondent for 6 years at the EDT. 4 of those years were when he was over 41. He is entitled to 8 weeks’ wages as his Basic Award.[6]Therefore, his Basic Award is £3,620.56. Compensatory Award[7]The Compensatory Award compensates for the losses the Claimant suffered as a result of his dismissal. It is composed of a Prescribed Element (essentially dealing with losses up to the date of the hearing) and a Non-Prescribed Element (essentially dealing with other losses).[8]If the Claimant had not been dismissed then he would have worked normally until 4 November 2020, when there was a lockdown. From the EDT to 4 November 2020 the Claimant lost wages in respect of 80 days. His Basic Award would cover 42 of those days, but he worked for 9 days after he was given his notice. He would have been paid £364.59 net per week. As such, he requires compensation for 49 days (6.7143 weeks) at £364.59 per week. That is £2,447.96.[9]The Claimant would then have worked on reduced hours or been furloughed at 80% pay until 2 December 2020, when there was an end to lockdown. The Claimant lost wages in respect of 4 weeks. He would have been paid £306.86 net per week. As such, he requires compensation for 4 weeks at £306.86 per week. That is £1,227.44.[10]The Claimant would then have worked normally until 19 December 2020, when there was a lockdown. The Claimant lost wages in respect of 17 days (2.4286 weeks). He would have been paid £364.59 net per week. As such, he requires compensation for 2.4286 weeks at £364.59 per week. That is £885.43.[11]The Claimant would then have worked on reduced hours or been furloughed at 80% pay until 22 February 2021, when he got a new permanent better paying job. The Claimant lost wages in respect of 65 days (9.2857 weeks). He would 2 of 4 have been paid £306.86 net per week. As such, he requires compensation for 9.2857 weeks at £306.86 per week. That is £2,849.41.[12]The Claimant’s lost pension contributions in respect of 23 weeks at £16.74 per week are £385.02.[13]Against this the Claimant gives credit for £5,226.86 earned since his dismissal.[14]His total lost wages are therefore £2,568.40.[15]There is no other claim which forms part of the Prescribed Element.[16]Therefore, the Prescribed Element is £2,568.40.[17]The Claimant is awarded £500 for loss of statutory rights.[18]The Claimant has no future losses as he now has a better-paying job.[19]Therefore, the Non-Prescribed Element is £500.[20]Therefore, the total Compensatory Award is £3,068.40.
Conclusion
[21]The total monetary award for unfair dismissal is £6,888.96. Employment Judge S Knight Date: 5 May 2021 3 of 4 ANNEX 1: REMEDY CALCULATIONS FINDINGS OF FACT Fill in only the yellow cells. Workings Date of birth 08/03/1975 Age at EDT 45 Years:Weeks Calculation Date of start of employment 01/12/2013 Full years of service at EDT 10.5 weeks per full year worked under 22; Effective date of termination ("EDT") 16/08/2020 Pay frequency Weekly 1 week per full year worked between 22 and 41; 1.5 weeks per full year worked 41 or older. Gross Weekly Pay £452.57 Additional Award made? No Net Weekly Pay £364.59 Compensatory Award uncapped? No ERA ss 100(1)(a); 100(1)(b); 103A; 124(1A) Automatically unfair, with min. Basic Award? No ERA ss 100(1)(a); 100(1)(b); 101A(d); 102(1); 103 Automatically unfair for blacklisting? No STATUTORY CAPS AND MINIMA Fill in only the yellow cells. Always required Required where listed in yellow Max weekly gross wage at EDT £538.00 Max compensatory award at EDT £88,519.00 Max compensatory award at EDT in this cas £23,533.64 BASIC AWARD Fill in only the yellow cells. Monthly Weekly No of Weeks Total Running total Gross Wages £1,961.14£452.57 8.0 £3,620.56£3,620.56 Subtract Unreasonable refusal of reinstatement s 122(1) £0.00£3,620.56 Conduct / contributory fault s 122(2) & 3 0% £0.00£3,620.56 Redundancy payment s 122(4) £0.00£3,620.56 NET BASIC AWARD £3,620.56 -ve value is subtracted from Comp. Award COMPENSATORY AWARD Fill in only the yellow cells. Prescribed Element Loss of wages inc taxable benefits to date of hearing (after allowing for failure to mitigate) Dismissal to 4 Nov lockdown Monthly Weekly No of Weeks Total Net average lost wages £1,579.89£364.59 6.7143 £2,447.96 a 4 Nov lockdown to 2 Dec unlock Monthly Weekly No of Weeks Total Net average lost wages £306.86 4 £1,227.44 b 3 Dec unlock to 19 Dec tier 4 Monthly Weekly No of Weeks Total Net average lost wages £364.59 2.428571429 £885.43 b1 20 Dec tier 4 to 22 Feb job Monthly Weekly No of Weeks Total Net average lost wages £306.86 9.285714286 £2,849.41 b2 Total Lost Wages to Hearing £7,410.24 a+b+b1+b2 Running total Lost ERS pension contributions Monthly Weekly No of Weeks Total 4.591% £72.54£16.74 23.0000 £385.02£7,795.26 Subtract Wages earned since dismissal £5,226.86£2,568.40 Actual total lost wages £2,568.40£2,568.40 Adjust by subtracting or adding, as appropriate Multiplier Total Chance of dismissal anyway with fair procedure Polkey 0% £0.00£2,568.40 ACAS Code breach increase / reduction s.124A 0% £0.00£2,568.40 Conduct / contributory fault s.123(6) 0% £0.00£2,568.40 PRESCRIBED ELEMENT £2,568.40 c Non-Prescribed Element Estimated future loss of wages (allowing for failure to mitigate) Monthly Weekly No of Weeks Total Running total Weeks to restoration of old wage level 0.0000 Wages earned in new job £0.00£0.00 Net average lost wages £0.00£0.00£0.00£0.00 Loss of other benefits £0.00£0.00 Loss of pension rights £0.00£0.00 0.0000 £0.00£0.00 Loss of statutory protection £500.00£500.00 Loss of right to long notice £0.00£500.00 Expenses in looking for work £0.00£500.00 Total £500.00 Adjust by subtracting or adding, as appropriate Multiplier Total Any other payment by Respondent (except excess of redundancy payment) £0.00£500.00 Chance of dismissal anyway with fair procedure Polkey 0% £0.00£500.00 Reduction for accelerated receipt @50% of current bank interest rate £0.00£500.00 ACAS Code breach increase / reduction (-25% to +25%) s.124A 0% £0.00£500.00 Failure to provide employment contract: 0, 2, or 4 weeks' EA s 38 & Sched. 5 0 £0.00£500.00 Protected disclosure not made in good faith (0% to 25%) s.123(6A) 0% £0.00£500.00 Conduct / contributory fault s.123(6) 0% £0.00£500.00 Excess of redundancy payment over basic award s.123(1) or (7) £0.00£500.00 Gross up if over £30,000 e.g. use Finlay table £0.00£500.00 NON-PRESCRIBED ELEMENT £500.00 d COMPENSATORY AWARD £3,068.40 c + d ADDITIONAL AWARD for non-re-engagement s 117(3) Fill in only the yellow cells. Monthly Weekly No of Weeks Total ADDITIONAL AWARD £1,961.14£452.57 0 £0.00 SUMMARY Fill in only the yellow cells. Basic Award £3,620.56 Compensatory Award £3,068.40 Additional Award £0.00 TOTAL MONETARY AWARD owed by the Respondent £6,688.96 EXCESS of Total Monetary Award over the Prescribed Element £4,120.56 Less recoupment £0.00 TOTAL DUE to the Claimant £6,688.96 4 of 4
Procedure
[22]A party’s lies may be the basis of an allegation of vexatious or unreasonable conduct. In this regard, in the case of Arrowsmith v Nottingham Trent University [2011] EWCA Civ 797; [2012] I.C.R. 159 (10 June 2011) the Court of Appeal 6 of 11 approved of the following passage in HCA International Ltd v May-Bheemul EAT 0477/10 (23 March 2011): “39. Thus, a lie on its own will not necessarily be sufficient to found an award of costs. It will always be necessary for the tribunal to examine the context and to look at the nature, gravity and effect of the lie in determining the unreasonableness of the alleged conduct. “40. As this last case makes abundantly clear, no point of principle of general application is established in any of the cases being relied upon by Mr Beyzade [and they included the Daleside case]. In our judgment the employment tribunal's reasoning in the present case, at para 12 of their judgment, is unimpeachable. 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.”[23]In Kapoor v Governing Body of Barnhill Community High School EAT 0352/13 (12 December 2013) the Employment Appeal Tribunal confirmed that costs should not automatically be awarded simply because a party has knowingly given false evidence. Absence of reasonable prospects of success[24]In Radia v Jefferies International Ltd [2020] I.R.L.R. 431 (21 February 2020) the EAT gave guidance on how tribunals should approach costs applications under rule 76(1)(b). It emphasised that the test is whether the claim had no reasonable prospect of success, judged on the basis of the information that was known or reasonably available at the start. Thus, the tribunal must consider how, at that earlier point, the prospects of success in a trial that was yet to take place would have looked. In doing so, it should take account of any information it has gained, and evidence it has seen, by virtue of having heard the case, that may properly cast light back on that question, but it should not have regard to information or evidence which would not have been available at that earlier time. The EAT went on to clarify that the mere existence of factual disputes in the case, which could only be resolved by hearing evidence and finding facts, does not necessarily mean that the tribunal cannot properly conclude that the claim had no reasonable prospects from the outset, or that the party could or should have appreciated this from the outset. That depends on what they knew, or ought to have known, were the true facts, and what view they could reasonably have taken of the prospects of the claim in light of those facts.[25]In Opalkova v Acquire Care Ltd EAT 0056/21 (1 September 2021) the EAT considered the test for determining whether an employer’s response has no reasonable prospects of success. There are 3 key questions: “First, objectively analysed when the response was submitted did it have no reasonable prospects of success; or alternatively at some later stage as more evidence became available was a stage reached at which the response ceased to have reasonable prospects of success? Second, at the stage that the response had no reasonable prospects of success did the 7 of 11 respondent know that was the case? Third, if not, should the respondent have known that the response had no reasonable prospect of success?” Costs are compensatory[26]As Pill LJ noted when giving the lead judgment in the Court of Appeal case of Lodwick v Southwark London Borough Council 2004 ICR 884 (18 March 2004), it remains a fundamental principle that the purpose of an award of costs is to compensate the party in whose favour the order is made, and not to punish the paying party.[27]Given that costs are compensatory, it is necessary to examine what loss has been caused to the receiving party. In this regard in the case of Yerrakalva at ¶ 54 Mummery LJ held that costs should be limited to those “reasonably and necessarily incurred”. Ability to pay is a relevant factor for the Tribunal to consider[28]The Employment Tribunal Procedure Rules rule 84 provides as follows in relation to ability to pay: “84. In deciding whether to make a costs, preparation time, or wasted costs order, and if so in what amount, the Tribunal may have regard to the paying party’s […] ability to pay.”[29]A tribunal is not obliged by rule 84 to have regard to ability to pay — it is merely permitted to do so. That said, in Benjamin v Interlacing Ribbon Ltd EAT 0363/05 (1 November 2005) the EAT held that where a tribunal has been asked to consider a party’s means, it should state in its reasons whether it has in fact done so and, if it has, how this has been done.[30]As noted by the EAT in Howman v Queen Elizabeth Hospital Kings Lynn EAT 0509/12 (30 April 2013) at ¶ 13, any tribunal when having regard to a party’s ability to pay needs to balance that factor against the need to compensate the other party who has unreasonably been put to expense. The former does not necessarily trump the latter, but it may do so. Conclusions Was the application for costs made in time?
Conclusions
[31]The Respondent says that the Claimant’s application for costs is late. The Respondent says that the application for costs “must be made within 28 days of Judgment”. The Respondent therefore says that “the application in this matter is clearly out of time and prejudicial to the rights of the Respondent. To this end it is submitted that the Claimant’s application be struck out.”[32]Contrary to the Respondent’s case, rule 77 requires the application to be made “up to 28 days after the date on which the judgment finally determining the proceedings in respect of that party was sent to the parties”. As is clear from the chronology above, the Claimant’s solicitors made the application for costs on the 28th day from the date on which the Judgment was sent to the parties. As 8 of 11 such, they made the application on the last day for doing so. The application is in time. Does the Respondent’s conduct fall within Rule 76(1)? Whether the Respondent has acted vexatiously or otherwise unreasonably in its conduct of the proceedings (rule 76(1)(a))[33]The Claimant says that the Respondent’s entire response to the claim was based on a false premise: that the Claimant resigned. The Tribunal rejected that premise. The Tribunal found that the Respondent knew that the premise was untrue. It was therefore unreasonable and vexatious to take this case to trial. Further, the Respondent’s conduct of the case involved accusing the Claimant of dishonesty when it was itself putting false evidence before the Tribunal.[34]The Respondent has characterised the Claimant’s application for costs as being based on the contention “that where a Respondent is unsuccessful at trial, they essentially had a Defence which had no reasonable prospect of success, and that their actions in defending were vexatious and unreasonable.”[35]However, that is not the Claimant’s case in relation to costs. The Claimant’s case is that the Respondent’s response had no reasonable prospect of success because the Respondent knew that it was based on untrue evidence.[36]I agree with the Claimant about whether the actions of the Respondent were unreasonable. The Respondent has always known that if the truth was known, then it could not win. In terms of liability, there was a central issue in the case: whether the Claimant had resigned or had been dismissed. On this central issue, the Respondent knew that their response was untruthful from the outset.[37]In this light, the Respondent’s case had no basis in law, and its effect has been to subject the Claimant to the inconvenience, harassment, and expense of litigating proceedings. It was both unreasonable and vexatious to conduct proceedings on this false premise and to make accusations that the evidence of the Claimant was untrue. Whether there were no reasonable prospects of success (rule 76(1)(b))[38]The Claimant says that the Respondent knew that its response was untruthful from the outset, and therefore that it had no reasonable prospects of success.[39]The Respondent says that this case was fully litigated, and that the Respondent complied with all directions. At no stage did the Claimant make an application for strike out. The case was well-prepared by the Respondent.[40]The Respondent is correct in each of these submissions. However, good conduct of litigation is what is expected of the parties. It does not prohibit the making of a costs order on some other ground. Further, the fact that a strike out order was not applied for or granted is of limited relevance.[41]When the response was submitted by the Respondent, objectively analysed, it did not have any reasonable prospects of success. The Respondent knew that 9 of 11 this was the case, given that it knew it was calling untrue evidence in order to substantiate its defence. The mere existence of factual disputes in the case, which could only be resolved by hearing evidence and finding facts, does not necessarily mean that the tribunal cannot properly conclude that the response had no reasonable prospects from the outset. The Respondent knew what view they could reasonably have taken of the prospects of the claim in light of the true facts of the case. The only view that could have been reached is that the response had no reasonable prospects of success. Should the Tribunal exercise its discretion to make an order for costs?[42]The hearing was conducted with efficiency and a high degree of competency by counsel for both sides. No point is taken, or could conceivably be taken, about the way that the hearing was dealt with by counsel.[43]Equally, the Respondent has had the benefit of competent representation by solicitors.[44]The fault in this case lies entirely with the Respondent.[45]I bear in mind that it is exceptional to make a costs order in the Tribunal.[46]However, the actions of the Respondent in this case, in basing its entire response on factual contentions it knew to be false, were egregiously bad. This is a case where the ordinary position that costs do not follow the event can and should be departed from.[47]The Respondent challenges the assumptions underlying the Claimant’s assertion that the Respondent is able to pay any costs awarded. However, the Respondent has not said that they would be unable to pay part or all of any costs order. The Respondent has provided no evidence that they would be unable to pay part or all of any costs order. They have paid the original award for unfair dismissal and the increased amount that was agreed in response to the application for reconsideration. The Respondent has paid its representatives throughout the case. There is no evidence before the Tribunal on which it could be concluded that the Respondent now cannot pay any costs award.[48]In any event given the seriousness of the Respondent’s conduct, and the fact that the Claimant is a relatively low-earning individual who has unreasonably been put to expense, it would still be appropriate to make an order for costs.[49]As such, an order for costs will be made. What costs should be awarded?[50]The Claimant’s counsel’s fee for the hearing was well below a reasonable level. That fee was a disbursement which the Claimant has paid for. I award those costs in full.[51]The Claimant’s counsel’s fee in respect of the application for costs follows from the incurring of the original costs and the Claimant’s attempt to recover them. The 10 of 11 fee is low. That fee was a disbursement which the Claimant has paid for. I award those costs in full.[52]The Claimant’s counsel’s fee in respect of the application for reconsideration follows from errors made in the Schedule of Loss. It is not attributable to the Respondent. I make no award for those costs.[53]The Claimant’s solicitors billed for 31.65 hours’ work at £217 per hour plus VAT.[54]The Claimant’s Schedule of Loss contained errors. This led to the requirement to seek reconsideration. Work which contains errors is not necessary and the Respondent should not be responsible for paying for it. I would deduct 2 hours to account for this. However, this would not alter the total fee that the Claimant is due to pay to his solicitors, which (as a result of the CFA) is capped at 35% of his damages. £2,926.29 is the total amount owed to the Claimant’s solicitors, calculated as 35% of the total paid by the Respondent following the settlement of the application for reconsideration. That relates to 31.65 hours’ work (or 29.65 hours once the 2 hours for the Schedule of Loss is taken off). The fee is again low. I award those costs in full.[55]The Claimant attended the Tribunal hearing for 1 day, during the day. I have been provided with no evidence as to whether the Claimant was unable to attend work as a result (for example, attending work after the court day finished). In any event, I would not order the Respondent to pay the Claimant’s costs of attending as a witness, these being £88.16. I make no award for those costs.[56]As such, I order the Respondent to pay a total of £4,486.29 inclusive of VAT composed of:(1)£2,926.29 in respect of solicitors’ fees(2)£1,200 in respect of counsel’s fee for the hearing; and(3)£360 in respect of counsel’s fee for the application for costs.