Mr D Long v Arrow Precision Manufacturing Ltd: 3300459/2022

EMPLOYMENT TRIBUNALS

Case No 3300459/2022

Between

Mr D LongClaimant

Arrow Precision Manufacturing LtdRespondent

Before

Employment Judge K Hunt

In person for claimant

Mr Brudenell-Bruce (Managing Director (instructed by Respondent)) for respondent

Mr Brudenell Bruce (Managing Director (instructed by Respondent)) for respondent

Date 7 November 2023

JUDGMENT

[1]The claim of constructive dismissal is not well founded and is dismissed.

[2]The claim for 4 weeks’ wages relating to the period of lay off is not well founded and is dismissed.

REASONS

Conclusions

[1]The claimant was employed by the respondent as a CAD/CAM Designer and Machinist with continuous employment from 6 December 2004 until 19 January 2022, when his employment ended following his resignation. The Respondent notified the claimant of a period of lay off in October 2021 to which the claimant objected. The claimant raised a grievance objecting to the lay off which he said was in breach of contract, relying on a contract of employment described as the 2005 Contract. The Respondent investigated the grievance, which was not upheld and in laying off the claimant relies on a contract of employment described as the 2018 Contract which contains a short time working and lay off clause and/or relies on custom and practice. The claimant brings claims for constructive dismissal and loss of wages of 4 weeks’ pay between 18 October 2021 and 15 November 2021. Claims and Issues

[2]The claimant brings a claim for constructive dismissal and a claim for 4 weeks’ loss of wages when laid off, which he claims is in breach of contract.

[3]The issues were identified and agreed at the outset of the hearing. Constructive dismissal

[4]Did the respondent do the following things: i) lay off the claimant for 4 weeks from 18/10/21 to 15/11/21? ii) fail to consult the claimant prior to the lay off? Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017 iii) by laying off the claimant was the respondent in breach of the 2005 Contract that the claimant relies on?

[5]The respondent defends the claim and relies on the 2018 contract and an express term with the right to lay off and/or relies on custom and practice.

[6]Did laying off the claimant breach the implied term of trust and confidence? The Tribunal will need to decide: i) whether the respondent behaved in a way that was calculated or likely to destroy or seriously damage the trust and confidence between the claimant and the respondent; and ii) if so, whether it had reasonable and proper cause for doing so.

[7]Was the breach a fundamental one? The Tribunal will need to decide whether the breach was so serious that the claimant was entitled to treat the contract as being at an end.

[8]Did the claimant resign in response to the breach? The Tribunal will need to decide whether the breach of contract was a reason for the claimant’s resignation.

[9]Did the claimant affirm the contract before resigning? The Tribunal will need to decide whether the claimant’s words or actions showed that they chose to keep the contract alive even after the breach.

[10]If the claimant was dismissed, what was the reason or principal reason for dismissal i.e. what was the reason for the breach of contract? Was it a potentially fair reason?

[12]Did the respondent act reasonably in all the circumstances in treating it as a sufficient reason to dismiss the claimant? Breach of Contract

[13]The claimant claims for loss of 4 weeks’ wages (during the lay off) which the claimant says was in breach of contract.

[14]Did the respondent lay off the claimant without pay?

[15]If so, was this in breach of contract? Procedure – documents and evidence heard

[16]At the outset of the hearing, it was noted that the correct respondent was Arrow Precision Manufacturing Ltd as determined by previous order. The claimant represented himself and Mr Brudenell-Bruce, managing director of the respondent, represented the respondent

[17]The above list of issues was agreed at the outset of the hearing.

[18]I had before me a bundle of documents of 92 pages and witness statements for the claimant and for Mr Brudenell-Bruce and Mr Dean Holloway for the respondent. There was also produced a recording of the first grievance meeting on 10 November 2021 and the tribunal was directed to one passage of the recording in the claimant’s witness statement, which I listened to during reading time. Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017

[19]There was a discussion as to whether the respondent wanted to rely on a second recording of the second grievance hearing, which was not included in the papers or produced at the hearing. Mr Brudenell-Bruce explained that it was no longer available on their server, so I did not have it before me. Fact-Findings

[20]I set out the following findings of fact which I determined as relevant to the issues. I am not making findings of fact on all the points in dispute between the parties, only those that are relevant to the issues in the case as now identified.

[21]The claimant was employed by the respondent as a CAD/CAM Designer and Machinist with continuous employment from 6 December 2004 until 19 January 2022, when his employment ended following his resignation.

[22]In 2019 the respondent restructured its business and made redundancies and Mr Brudenell-Bruce confirmed in evidence that the old company closed, and some staff moved to another existing company, including the Claimant. This was not a matter raised by either party in the claim or response or otherwise at the hearing. Mr Brudenell-Bruce confirmed in oral evidence that there may have been a letter issued at the time and that all employees’ terms and continuity were honoured. The claimant did not dispute this and accepted that he had agreed to moving to the new company, when this was put to him in evidence.

The Issues

[23]The Respondent is a manufacturer in the Paintball industry and has faced various financial difficulties (through recessions and Brexit) and has seen a reduction in business reducing from a staff of 50 when the claimant joined to less than 10 people when his employment ended. Due to these difficulties and the seasonal nature of the paintball industry, the respondent has on occasion had to lay off staff or implement short time working over the years and there was evidence of this in the bundle (pages 28-31 and 71 –79).

Relevant Law

[24]In October 2021 there were financial difficulties caused by a lack of income and the need for staff cuts and reductions in working hours. At the time, due to a delay in the electricity supply following machinery being moved, there was a delay in returning to full production and no work for the Claimant.

[25]The Respondent wrote to the claimant by letter dated 12 October 2021 informing him of the need for a temporary lay off to start on 18 October 2021, asking him to agree to this by signing and returning the enclosed letter and informing him that he would be entitled to a statutory guarantee payment of £30 per day for 5 days. The letter was sent by post and email (at 3.59pm) and received by the claimant that evening at 6pm.

[26]In his evidence at the hearing Mr Brudenell-Bruce explained that where only one person was affected, he did not believe there was a need to consult because the action to be taken only applied to that one person. However, rather than just invoking short time working or lay offs, the practice was that he always wrote to staff explaining the situation. Therefore, as there was no work for the claimant, he was asked to agree to a lay off. Mr Brudenell-Bruce accepted he made an error in counting a week’s notice and only gave 6 days’ notice.

[27]The claimant replied by email the same evening at 6.18pm stating that he did not agree to being laid off and referred to the terms of his contract dated 1 March 2005 (“the 2005 Contract), which did not allow for short hours or lay offs, asserting that he should be paid full salary during any lay offs or short hours unless he agreed otherwise. Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017

[28]The respondent replied by letter dated 14 October 2021 and referred to the new contract issued in 2018 (“the 2018 Contract”), which had been supplied to the claimant and all staff. The respondent noted that on issuing the 2018 Contract, the claimant had asked for corrections relating to holiday entitlement, paid breaks and flexitime and had accepted the 2018 Contract, which contains a short time working and lay off clause. The respondent also referred to previous occasions when the claimant had agreed to reduced working in 2009 and 2012 and further lay offs and short time working in 2016 and 2017. The respondent stated that even if there was no short time working and lay off clause in the contract, there was a custom and practice of using these measures repeatedly to ensure the financial viability of the company as temporary measures during short term difficult periods. The respondent confirmed that the lay off would commence on 18 October 2021.

[29]The claimant replied on 14 October 2021 by email at 19.19 confirming that he still did not agree to the lay off and that the 2018 Contract was never signed and agreed, that it had been returned to Dean (his line manager) and that he had been chasing for a final version for 2 years. Therefore the 2005 Contract was his current contract. He also disputed that the previous occasions amounted to a custom and practice and that he would attend work on Monday unless a mutually beneficial agreement was reached in the meantime.

[30]On 15 October the claimant raised a grievance by letter about the ‘new contract’ and the proposed lay off and that his trust and confidence in the Respondent had been destroyed, setting out his complaints relating to the new contract, which he said contained fundamental errors, previously raised with the works manager and that he had been continually asking for a revised contract and was still waiting and had been working under protest ever since. He also repeated his objection that lay offs and short hours were not custom and practice.

[31]The respondent replied by letter dated 15 October to the claimant's email and grievance letter, confirming that they would investigate his complaints and hold a grievance hearing and enclosing a copy of the claimant's marked up 2018 Contract (page 34-44 of bundle), which was relied on at clause 7.3 in respect of the temporary lay off as well as custom and practice. The claimant was advised that if he attended the workplace before being asked to return to work, he would not be paid.

[32]The claimant replied by email on 15 October 2021 that he would not attend work on Monday but that he was doing so under protest.

[33]The claimant was invited to a grievance hearing by letter dated 1 November 2021, enclosed with the letter were various documents gathered during the investigation into his complaints.

[34]The grievance meeting was held on 10 November 2021 and heard by Mr Brudenell-Bruce, the managing director. The claimant was advised of the right to be accompanied.

[35]The claimant was also provided with a letter dated 9 November 2021 delivered by hand (on 10 November 2021) and by email, advising that the lay off would end on 12 November 2021 and he was required to return to work on 15 November 2021.

[36]The Claimant replied by letter dated 10 November 2021 stating that he would return to work on 15 November but did so under protest until his grievance had been satisfactorily resolved.

[37]The grievance hearing took place on 19 November 2021. There were no notes or transcript of the hearing in the Bundle. I was provided with a recording and referred Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017 to one section of the recording by the claimant in his statement, relating to a comment made by Mr Brudenell-Bruce during the grievance meeting, that when making lay offs, there was no requirement to consult with people who are not being considered for lay offs. This was referenced as supporting the claimant's evidence that there was no custom and practice of lay offs and that based on this comment, there was no way of him knowing about lay offs based on or through custom and practice.

Conclusions

[38]Following the meeting the respondent carried out further investigation into the claimant's grievance and his email regarding ‘custom and practice’. The Claimant was sent further documents from the investigation and invited to a meeting on 25 November 2021. There were no notes of the hearing in the Bundle and no recording provided.

[39]On 20 December 2021 the claimant submitted his resignation, stating that “after recent events, he felt that there was no alternative but to resign from his post and that he was still expecting a satisfactory outcome from his grievance. He thanked the respondent for the last 17 years and stated that in general he enjoyed his time and was disappointed that it had ended like this. He gave one month’s notice and confirmed his last working day would be 19 January 2022.

[40]The respondent accepted his resignation by letter dated 23 December 2021, noting that contractually he was required to give two months’ notice but accepting one month.

[41]The claimant's employment terminated on 19 January 2022. Grievance Outcome

[42]The Respondent wrote to the claimant by letter dated 20 January 2022 with the outcome of the grievance and apologising for the delay. The letter summarised the claimant's grievance as being that the respondent did not have the contractual right to lay off the claimant because he had not signed the 2018 Contract. The grievance was not upheld and the respondent set out the reasons for this in the letter (pages 83-84). Briefly this included that the claimant received and reviewed the terms of the 2018 Contract, that the queries he raised were resolved and he raised no further objections; that he later requested a further amendment to not work on Fridays, which was agreed; that he did not raise any concerns about the contract until he was notified that he would be laid off for a short period, after which he said he was working under the 2005 Contract; that his suggestion he could not object because he had no access to company email was proven not to be the case, as there was evidence that he had access to email since being given the 2018 Contract; that the first time he said he was working under protest was after he was informed of the lay off and that by a course of conduct over almost 3 years prior to the lay off, he had worked under the 2018 Contract without any objection; finally that even if the Company did not have the contractual right under the 2018 Contract to implement the lay off clause there were similar situations in the past and it was custom and practice to lay off staff in times of financial difficulties. He was offered a right of appeal.

[43]The claimant appealed by letter dated 24 January 2022, setting out his grounds of appeal. Briefly, including how the grievance had been handled and that it had taken over 3 months to receive the final decision; why he felt the decision was wrong, namely that he had returned the contract for correction and had chased Dean verbally over the last 3 years; that the amends were verbal and of fundamental errors, which he requested before reviewing the contract in its entirety, and that although he had access to email, his 2005 Contract said that concerns should be raised verbally, which he did; that he still believed he was working under his original contract; and that agreeing to short hours to see the Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017 company through a rough patch was different to agreeing to a lay off with no pay; and that in the grievance meeting the respondent had said that unless people were involved they were not told about any layoffs or short working, so how could it be something expected by all and that two lay offs in 17 years, in his view, did not constitute custom and practice.

[44]The respondent did not hold an appeal meeting and in his evidence at the hearing, Mr Brudenell-Bruce stated that at the second grievance meeting the claimant had repeated everything from the first meeting and did not add any information, he subsequently left employment and there was no new information and he stated that is why he did not answer the appeal. The 2018 Contract

[45]In or around early 2019, the Respondent updated and issued new contracts to all staff prepared by its legal advisers, who provided a template. In evidence Mr Brudenell-Bruce gave as an example of updating, removing reference to a retirement age.

[46]Clause 7 of the 2018 Contract relates to ‘Salary and Benefits’ and includes at clause 7.3 the following: “If there is a reduction in work the Company may temporarily lay you off without pay or reduce your working hours and your pay proportionally on giving not less than one weeks’ notice in writing. Depending on the circumstances you may be entitled to a statutory guarantee payment.”

[47]Mr Holloway became the Claimant's line manager in February 2019. In April 2019 the Claimant sent a handwritten note to Mr Holloway raising various matters (page 32) and including a statement ‘still no contract’. Mr Holloway replied by letter dated 3 May 2019 (page 33), responding to the matters raised and acknowledging that the claimant had returned his contract unsigned because an additional holiday allowance had been overlooked, and he enclosed amended contracts for him to sign.

[48]In his witness statement and evidence Mr Holloway confirmed that he always sent out two contracts, one to be signed and returned and one retained by the employee, he confirmed he had sent out two contracts to the claimant and I accept his evidence on this.

[49]A few days later the claimant told Mr Holloway that there were still errors and Mr Holloway asked him to mark it up and return it to him. He returned one copy of the contract with handwritten markings or annotations first at clause 6 re Working Hours, where at 6.1 he marked hours down to ‘37.5’ from 40 and marked ‘paid’ rather than an unpaid lunch break, with a query re ‘tea breaks?’ marked below this. At the end of 6.3 a line was drawn in the margin and ‘FLEXITIME’ written below the clause and at the end of clause 10.8 in the margin, it was marked with ‘12.1’ and an arrow pointing to the space between the end of 10.8 and beginning of the next clause 11.

[50]In evidence the claimant said that he did not recall making that last marking/annotation, it was Mr Brudenell-Bruce's evidence that the marking was in the same writing and the same ink on the original document still on file and on balance, considering the evidence in the bundle, I find that more likely than not to be the case.

[51]Mr Holloway recalled that on receiving the marked up copy, he spoke to Mr Brudenell-Bruce about the changes and recalled in his evidence it was most likely the same day or the next day. He was told by Mr Brudenell-Bruce that as the mark Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017 ups related to the claimant’s existing working pattern, they were agreed but there was no need to reissue the contract again.

[52]Mr Holloway met with the Claimant, which as he recalled in his evidence may have been the next day or was at most within the space of 2 or 3 weeks maximum after he received the contract with markings. In his evidence Mr Holloway recalled that the conversation took place in the office and confirmed in his statement and under cross examination that he explained to the claimant that the details written down by him were accepted that they were not going to reissue the contract again, as they would not be re-writing the contract for minor points about his working patterns but that if he wanted a letter to confirm the working patterns they would provide that.

[53]He recalled that the Claimant said he would speak to his wife (who works in HR) but that he never came back to Mr Holloway after that. Mr Holloway said in evidence that this was the last conversation that he recalled about the 2018 Contract and that any conversation after that (the claimant having referred to a conversation he recalled taking place by the Hapse machine) would only have had the same answer. Mr Holloway denied ever saying, as suggested by the claimant, that he told him to ‘leave it alone’ after re-issuing the contract and could not recall any other conversation where he had said that and I accept his evidence on this.

[54]Mr Holloway also said in evidence that when the claimant wanted to change his working pattern again in March 2020, reducing to 4 days a week on the same pay in lieu of a pay rise, this was agreed verbally with him and the claimant did not ask for any amendment to be made nor ask for the reissue of his contract.

[55]It was put to the claimant in cross examination by Mr Brudenell-Bruce that he had read the contract and did not ask for any changes, beyond those he marked up. The claimant's evidence was that he had only read the first two pages up to clause 7. On it being put to him that this included at clause 7.3 the short time working and lay off clause, he modified this to say that he had only read his personal details and his salary at the beginning of clause 7 and had not read beyond that apart from possibly the holiday clause, which it is noted is at clause 11. On being further cross examined about the fact that he had read beyond this having marked the contract up between clauses 10 and 11 he said he did not recall doing so. Based on the evidence heard and read in the bundle, on balance I find that it is more likely than not that the claimant did read beyond clause 7.

[56]I accept the claimant's evidence that prior to being sent the amended contract by Mr Holloway on 3 May 2019, he had chased and asked for a copy of his contract and complained that he was still waiting, as found at paragraph 49 above. His evidence was that after providing the further marked up copy of his contract, he fully expected to receive a further amended copy for final reading and approval and that he had continually asked Mr Holloway for a revised copy of his contract.

[57]I accept Mr Holloway’s evidence that at that meeting he made clear that the contract was not going to be reissued again and that ‘the contract stood’ and I accept as credible his evidence that the claimant responded that he would speak to his wife.

[58]From the evidence before me in the bundle and evidence heard from both Mr Holloway and the claimant, who in his evidence did not specify any times or dates in support of his assertion, including no reference to March 2020, when further changes to working times were verbally agreed with Mr Holloway, I find no evidence to support that the claimant continually asked for a revised contract after the meeting with Mr Holloway in or around May 2019 (referenced at paragraphs 54 and 55 above) and also find that he did not ask for a revised contract in March 2020. Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017

[59]I find that the claimant did not come back to Mr Holloway or the respondent to request any further amendments or to request a reissued contract for review and find that he continued to work under those terms and arrangements, with amendments as verbally agreed in May 2019 and March 2020. I find no evidence before me that he was working under protest after the amendments on the marked up 2018 Contract were agreed by Mr Holloway in or around May 2019 and in March 2020. Custom and Practice

[60]In the Bundle there is evidence of previous occasions where the respondent had implemented lay offs and short time working prior to issue of the 2018 contract. This includes agreements specific to the claimant in previous years and statements produced for the grievance investigation from staff stating that they were always aware of the possibility of short time working or lay offs at this time of the year (going into winter). Mr Holloway also confirmed in his evidence that he was asked about this every year by production staff, on whether there would be any cuts coming over the winter and that it was widely expected.

[61]The claimant in his evidence stated that he had only ever been put on short hours twice and he was not aware of any colleagues being put on short time working or lay offs over the years, as he worked in a different building with fewer colleagues, in isolation from the rest of the workforce.

[62]He was asked in cross examination about colleagues and friends that he spoke to regularly in the paint factory or in the office, when he went across to the other building and also about a colleague he worked alongside, who had been laid off. His evidence was that he had never spoken to colleagues about such matters and was unaware of others on being put on short hours or being laid off.

[63]The paint factory and the building that the claimant had worked in for the majority of his employment until 2019, were on adjacent sites and approximately 800 yards apart, originally separated by a fence. The fence was taken down to allow free movement of fork lift trucks between the two sites. The office where admin and pay roll were based and timesheets were delivered was in the paint factory. I find based on the evidence heard including from the claimant that the claimant did visit the other site where the office and paint factory were based and speak to colleagues regularly during his employment.

[64]Taking account of the evidence in the bundle and evidence from Mr Holloway about the awareness of such measures being used by employees in the business, I find that the claimant's evidence that he was not aware of anyone being put on short time or being laid off or of the use of such measures during his employment, was not credible. I find that it was a measure practiced by the respondent over the years and that it was more likely than not that the claimant was aware of this. Law Constructive Dismissal

[65]The Employment Rights Act 1996 (“ERA”) at Section 95(1) states: “For the purposes of this part an employee is dismissed by his employer if (and subject to subsection (2) only if) :- ….............................. c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.”

[66]ERA Section 98(1) states: Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017 “In determining ...... whether the dismissal of an employee is fair or unfair, it is for the employer to show(a) the reason (or if more than one, the principle reason) for the dismissal, and

(b) that it is either a reason falling within subs (2) or some other substantial reason of a kind such as to justify dismissal.....: (2) A reason falls within this subsection if it (a) relates to the capability or qualifications of the employee.....(b) relates to the conduct of the employee.......

(d) is that the employee could not continue to work ....... without contravention ......... of a duty or restriction imposed by or under an enactment. ........................... (4) .......... whether the dismissal is fair or unfair ..........(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case.”

[67]In Western Excavating (ECC) Ltd v Sharp

[1978] ICR 221

CA it was established that: “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged form any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed.”

[68]A claimant may rely on an express or implied term of the contract. In Malik and Mahmud v BCCI

[1997] ICR 606

it was held that the employer shall not: “Without reasonable and proper cause, conduct itself in a manner calculated [or] likely to destroy or seriously damage the relationship of confidence and trust between employer and employee” Contractual changes

[69]The courts have been reluctant to find that employees consented to contractual changes without an express agreement to that effect. This is particularly so in the case of terms that do not have immediate effect. In Jones v Associated Tunnelling Co Ltd

1981 IRLR 477

, EAT, the EAT took the view that implying an agreement to a variation of contract is a ‘course which should be adopted with great caution’. It went on to state that ‘if the variation relates to a matter which has immediate practical application (e.g. the rate of pay) and the employee continues to work without objection after effect has been given to the variation (e.g. his pay packet has been reduced) then obviously he may well be taken to have impliedly agreed. But where… the variation has no immediate practical effect the position is not the same.’ Breach of Contract

[70]The Tribunal has jurisdiction to hear breach of contract claims under the Employment Tribunal Extension of Jurisdiction (England and Wales) Order 1994 (“the Order”). Under the Order, this applies only to claims brought by an employee (not worker) against their employer and to breaches of contract that are outstanding on the termination of employment. Conclusions Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017

[71]In reaching my decision, I have considered the relevant legislation and the brief summary of the law and case authorities included above. I will address each of the agreed issues in the case separately, but each conclusion has been drawn having taken account of the whole of the evidence in the case, both written and oral. Constructive Dismissal

[72]Did the respondent lay off the claimant for 4 weeks between 18 October 2022 and 15 November 2022? Yes, this is not in dispute.

[73]Did the respondent fail to consult the claimant? It is not in dispute that the respondent did not consult the claimant in person, before writing to him to notify him of the proposed lay off and seeking his agreement. In the circumstances, I conclude that the respondent did so believing that there was no requirement for wider or general consultation, where only one person was affected and that by notifying the claimant in advance and seeking agreement, the respondent was following the same practice as in previous lay offs and short time working. I conclude that given the financial difficulties, lack of income and lack of production work available at the time and as a small employer, the step taken by the respondent to notify the claimant of the proposed layoff was appropriate and reasonable in the circumstances.

[75]Was lay off in breach of the 2005 Contract that the claimant relies on? The claimant says that he never signed and returned the 2018 Contract and under the 2005 Contract there is no right to put him on short time work and/or lay off. The respondent relies on the 2018 Contract issued to and reviewed by the claimant and that contains a short-time work and layoff clause.

[76]A key issue is whether the 2018 Contract was accepted by the claimant. Taking account of the brief summary and case authority above and in considering whether the terms of the 2018 Contract, although unsigned, were accepted by word or deed on the part of the claimant, I remind myself that I should be careful in finding implied agreement to the terms, where the term in issue has no immediate practical effect. That said, I note that in the circumstances this was not a case where there had simply been silence or no response to the new contract by the claimant, as set out below.

[77]The claimant had twice returned the 2018 Contract seeking amendments, including on one occasion in May 2019 marking up those changes on the face of the contract. On neither occasion did the claimant object to the relevant term relating to short time working and lay off. This was notwithstanding that it was contained within clause 7 relating to salary and benefits (at 7.3), which he had read, though then modifying his answer to only having read the salary and his personal details. I have made findings, in light of Mr Holloway’s evidence, that at the meeting in or around May 2019, the claimant was told that the contract would not be re-issued again and ‘stood’ as drafted with the marked changes agreed. I take note of my findings as to the claimant's response at the time and his intention to speak to his wife, who worked in HR.

[78]Based on my findings on the evidence seen and heard, the claimant having twice reviewed and returned the contract seeking amendments, I conclude that he could be expected to have had regard to the full terms and conditions. I also conclude that following the meeting with Mr Holloway, at which he was told that the contract would not be reissued, he could be expected to raise any further queries or objections that he had. Based on his conduct thereafter, in not raising verbally or by email or hand written note any objections, and also taking note of my findings that this was despite a further change to his working arrangements in March 2020 that was verbally agreed, and my findings that he did not request a revised contract at that point, I conclude that the 2018 Contract was accepted by him and that he Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017 did not object to those terms in the ensuing 2 plus years and that he was not working under protest throughout that period.

[79]As I have concluded that the 2018 Contract was accepted by the claimant, I conclude that there was no breach of the 2005 Contract by the respondent as this was superseded by the 2018 Contract and that lay off was expressly provided for in the 2018 contract relied on by the respondent.

[80]As I have found there was a contractual right to lay off the claimant under the 2018 Contract, I do not need to decide on the alternative issue before me, as to whether there was a custom and practice to implement short time working or lay offs by the respondent. However, if I were to do so, based on the evidence before me, and even though intermittent, I would also conclude that there was a custom and practice of invoking short time working and lay offs by the respondent in times of financial difficulty; that staff were aware of this and also anticipated it at certain times of the year, according to seasonal fluctuations; and that as a long serving employee, it was more likely than not that the claimant was and would be aware of this practice, even though it had only been previously been applied to him on a limited number of occasions.

[81]Did the respondent’s actions in laying off the claimant breach the implied term of trust and confidence? Having concluded that the right to lay off the claimant was expressly provided for in the 2018 Contract and my findings that notifying him in advance in writing was appropriate and reasonable to the circumstances, I do not find that the respondent behaved in a way calculated or likely to destroy or seriously damage the relationship of trust and confidence for the reasons that follow.

[82]The respondent followed the practice previously invoked across the business as short term measures when facing financial difficulties including with the claimant, having on previous occasions notified and sought his agreement to short time working; the respondent did so in reliance on the terms of the 2018 Contract; the respondent fully investigated the claimant's objections to the respondent’s reliance on the 2018 contract and/or custom and practice raised by the claimant in his grievance, which was not upheld.

[83]In considering whether the respondent had reasonable and proper cause for its actions in laying off the claimant, I conclude that in the circumstances of financial difficulties and there being no production work for the claimant at the time, and in reliance on the 2018 Contract expressly allowing for lay off, it did.

[84]Was the breach a fundamental one? Having found that the respondent’s conduct did not amount to breach of any express term or the implied term of trust and confidence, I conclude that there was no breach and for the purposes of s.95 ERA 1996 the claimant was not entitled to resign and treat the contract as being at an end or terminated due to the respondent’s conduct. Breach of contract – claim for unpaid wages

[85]Based on my conclusions above that the respondent was entitled to lay off the claimant without pay, the claim for 4 weeks’ wages during the period of lay off in breach of contract also fails. ____________________________ Employment Judge K Hunt Date 13/02/2024 Case No: 3300459/2022 10.8 Reasons – rule 62(3) March 2017

[1]The claimant brought a claim for constructive dismissal following a period of layoff about which he raised a grievance and for breach of contract for 4 weeks’ loss of wages during the period of lay-off. It was the claimant's case that lay off was not properly applied and was in breach of his 2005 Contract and that he resigned due to a loss of trust and confidence in the respondent’s managing director, which had been damaged beyond repair. The respondent defended the claims and relied on its right to apply layoff under the 2018 Contract with an express clause providing for lay off and/or alternatively on custom and practice. The claims were heard on 6 and 7 November 2023 and both parties were unrepresented. Oral judgment was given on the second day of the hearing and both claims were dismissed. The Judgment was sent to the parties on 21 December 2023.

[2]The respondent’s representative requested written reasons and submitted an application for costs by letter dated 17 January 2024, copied to the claimant. The claimant submitted his objections to the application by letter dated 22 January 2024. Written reasons were provided on 13 February 2024 to send to the parties and the Judge ordered that the application would be considered based on their written representations. Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017 Application and Submissions

[3]The respondent asks the Tribunal to make a costs order in the sum of £8500 representing the Respondent’s legal costs incurred (excluding VAT and limited to the applicable court rate) for legal advice received by a Grade A solicitor with over 20 years qualification. The costs incurred and legal advice related to responding to the claim and steps taken in preparation for the hearing, though not representing the respondent at the hearing.

[4]In its application the respondent submits that before the claim was issued and throughout the proceedings, it put the claimant on notice that costs would be claimed if he continued with his unfounded allegations’

[5]The respondent’s application is made under Rule 76(1)(a) and/or (b) (set out below) and the respondent says that costs should be awarded against the claimant because the claimant’s claim was: i. vexatious; and ii. had no reasonable prospect of success.

[6]The respondent acknowledges that the claimant was unrepresented when engaging with Acas and relies on the claimant being fully aware that a costs application would be made if he did not withdraw his claim because Mr Brudenell- Bruce (the respondent’s managing director) made it clear to Acas that he would not settle if the claimant pursued legal action and specifically told Acas that no settlement negotiations would be entered into because the facts were clear that the Claimant’s claim was motivated by greed and malice; that the Claimant was angry that he had not been made redundant as he had demanded; that if the Claimant continued with his claims they would be defended; and that the Claimant should be under no doubt that a claim for costs would be made against him if he made a claim. The respondent asserts in its application that the conversation and warning would have been discussed with the Claimant by Acas but he issued the claim regardless of knowing the costs warning given.

[7]The respondent further relies on comments made by the claimant during the first grievance meeting (which was recorded) asserting that he stated: “I spoke to a lawyer” “it cost me” “It was my choice”

[8]Further during the second grievance meeting (which recording was not produced in evidence by the respondent and was no longer available at the time of the hearing) asserting that he stated: “The ACAS man told me” “case law" "probably about 50/50”

[9]The respondent relies on this as evidence that by his own admission the claimant sought legal advice before commencing proceedings but was not legally represented asserting in the application that this was “most probably due to being told he had no prospect of success”. The respondent also asserts that following the claimant’s alleged conversation with ACAS “they also stated that at best he had a 50/50 case”.

[10]The respondent refers to its ET3 response in which it was stated that the claim had no merit and should be struck out as an abuse of process, on the grounds that it was vexatious and had no reasonable prospects of success and requesting that the claimant be subject to a deposit order. I note that no application for a deposit order was subsequently made or ordered, though this is a factor, it is not determinative of the application now. Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017

[11]In addition, the respondent relies on Mr Brudenell-Bruce's witness statement in the proceedings, in which he stated: “I am conducting the hearing myself but I have already incurred substantial legal fees by defending this frivolous and malicious claim. When Dave’s claim fails I respectively ask the Tribunal to award costs against him on an indemnity basis as this claim has never had any prospect of succeeding as the 2018 contract allows for layoff and he knew full well that layoff and short term working were custom and practice.”

[12]Finally, the respondent’s representative in the application refers to the final hearing (at which Mr Brudenell-Bruce represented the respondent) and submits that it is their understanding that “the Tribunal Judge made findings that the Claimant had been untruthful in his responses throughout the hearing”. Written reasons had been requested with a view to including some of the Judge’s comments in support of the application but had not been received at the date of submitting the application. Written reasons have since been provided and notice is taken of this submission and will be addressed further below.

[13]In objecting to the respondent’s application for costs, the claimant submits that as an unrepresented individual, his conduct in the case was reasonable in the circumstances.

[14]He addresses the respondent’s first ground that the claim was vexatious, and denies that he ever demanded to be made redundant; that he had been planning to stay until retirement and that after 17 years of loyal service, during which he made sacrifices for the company and went above and beyond his duties, submits that he fails to see how this can be seen as ‘greedy and malicious’.

[15]The claimant submits that his claim was made because he believed that the layoff was wrongly put in place and not in the contract that he was working under and that the process was not timely and in light of this he had no alternative but to leave his employment. Further that he contacted Acas in the hope that the matter could be settled amicably outside of the tribunal system and that the respondent refused to engage in early conciliation.

[16]In addressing the respondent’s second ground that the claim had no reasonable prospects of success, he refers to his evidence at the hearing that he was never told that the contract he had been given (the 2018 contract) was the final one, and that this was said to have been at a meeting that he did not recall and for which there was no proof of it happening. He accepts, however, that Mr Holloway’s evidence on this was accepted by the Tribunal and that he was unable to prove that he was never told it was final. He submits that if he believed or had been advised that his claim was not reasonable, he would not have proceeded with a claim.

[17]In response to the comments relied on by the respondent at the first grievance meeting, as detailed above, he submits that he did not in the end speak to a lawyer due to costs and spoke to the CAB and Acas.

[18]With regard to comments at the second grievance meeting, he submits that if this was recorded it was without his knowledge and notes that it was not submitted as evidence nor was he provided with any minutes of the meeting.

[19]In response to the submissions made by the respondent in its application on those alleged comments, he says that he spoke to the CAB and Acas and was told by Acas that unfair dismissal claims generally have a 50/50 outcome. He states that he was never advised that his claim was 50/50 or that he did not have a reasonable Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017 claim. He again submits that if he believed, or had been made aware, that his claim was not reasonable, he would not have proceeded with a claim.

[20]He submits that during the grievance meetings he felt under pressure and was frustrated at not being able to finish sentences and being talked over; that he felt the grievance was not handled well due to there being no independent person involved in the decision making; and that there was no response to his appeal which is why he was keen to engage in Acas early conciliation so an independent source could support with getting a mutually beneficial outcome.

[21]He asserts that the reason he was not represented during the hearing or beforehand was for financial reasons as he was unable to afford legal representation.

[22]Finally, it is his submission that during the tribunal hearing, he was truthful throughout, but sometimes had trouble expressing himself effectively and getting his point across. He submits that at no point did he tell untruths as asserted by the respondent. The Issues

[23]The issues to be determined are:a. Has the claimant acted vexatiously in the bringing or conduct of proceedings (rule 76 (1) (a) of the ET Rules)? and/or

b. Did the claim have no reasonable prospects of success (rule 76 (1) (b) of the ET Rules)?

c. If either section above is engaged, in the Tribunal’s discretion, should a costs order be made?

d. If so, how much should be awarded? Relevant

Law

[24]References to rules below are to Rules under Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. The rules relevant to cost applications are set out in Rules 74-78 and 84.

[25]Rule 76 (1) provides that: “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 prospect of success; or ...........”

[26]Rule 77 provides that: “A party may apply for a costs order or a preparation time order at any stage 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. 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.

[27]Rule 78(1) provides that: “A costs order may— (a) order the paying party to pay the receiving party a specified amount, not exceeding £20,000, in respect of the costs of the receiving party;….”

[28]Rule 84 provides that: Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017 “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 (or where a wasted costs order is made the representative’s) ability to pay.”

[29]Haydar v Pennine Acute NHS Trust UKEAT 0141/17/BA In deciding whether to make an award for costs, there are three stages that a Tribunal must consider. First, a Tribunal must ask whether a party’s conduct falls within rule 76(1)(a) or 76(1)(b). If so, secondly, the Tribunal must go onto ask whether it is appropriate to exercise the Tribunal’s discretion to award costs against that party. If so, thirdly the tribunal may proceed to consider the amount of any award payable.

[30]Gee v Shell UK Limited

[2003] IRLR 82

. The Court of Appeal confirmed that that costs are the exception rather than the rule and that costs do not follow the event in Employment Tribunals.

[31]Oliver Salinas v Bear Stearns International Holdings

UKEAT/0596/04

/ DM. The question of whether a costs order was exceptional or unusual was not significant, so long as the proper statutory tests were applied.

[32]Health Development Agency v Parish

[2004] IRLR 550

, EAT . The discretion to make an order under Rule 76(1)(a) concerns the bringing or conduct of proceedings. A party’s conduct prior to proceedings cannot found an award of costs.

[33]“Vexatious” was defined by Lord Bingham in Attorney General v Barker

[2000] 1 FLR 759

and cited with approval by the Court of Appeal in Scott v Russell

[2013] EWCA Civ 1432

in relation to costs awarded by a Tribunal: “The hallmark of vexatious proceedings is…that it has little or no basis in law (or at least no discernible basis); that whatever the intention of the proceedings may be, its effect is to subject the defendant to inconvenience, harassment and expense out of all proportion to any gain likely to accrue to the claimant…”

[34]Radia v Jefferies International Ltd EAT 0007/18 The EAT gave guidance on how tribunals should approach costs applications under rule 76(1)(b). 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. 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. 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. Whether the claim had no reasonable prospects from the outset, or whether the claimant could or should have appreciated this from the outset depends on what the claimant knew, or ought to have known, were the true facts, and what view the claimant could reasonably have taken of the prospects of the claim in light of those facts.

[35]AQ Ltd v Holden

[2012] IRLR 648

, EAT. In exercising the discretion under both sub-sections representation is relevant – a party which is not professionally represented should not be judged by the same standard as a party who is professionally represented; although awards may be made against unrepresented parties, who can be found to have behaved vexatiously or unreasonably, even when proper allowance is made for their inexperience and lack of objectivity.

[36]Lake v Arco Grating (UK) Ltd EAT 0511/04, Rogers v Dorothy Barley School EAT 0013/12 Whether or not a costs warning has been given is a factor a Tribunal may take into account in exercising its discretion. Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017

[37]There is also Presidential Guidance on costs (Presidential Guidance; General Case management – Guidance Note 7 Costs) which I have taken into account.

Conclusions

[38]The respondent seeks a costs award against the claimant of £8,500 and in summary submits that the bringing of the claimant’s claim was vexatious and motivated by ‘greed and malice’ and that it had no reasonable prospects of success, as the 2018 contract allows for layoff and the claimant knew that layoff and short term working were custom and practice, as outlined above.

[39]The claimant denies that he acted vexatiously in bringing the claim or was motivated by greed or malice and that as an unrepresented individual believes that his conduct in the case was reasonable. He submits, in summary, that his claim was made because he believed that the layoff was wrongly put in place and that if he believed or had been advised that his claim was not reasonable he would not have proceeded with a claim, as outlined above. Has the claimant acted vexatiously in the bringing or conduct of proceedings (rule 76 (1) (a) of the ET Rules)?

[40]In considering this question, I am mindful that the discretion to make an order under Rule 76(1)(a) concerns the bringing or conduct of proceedings and a party’s conduct prior to proceedings cannot found an award of costs. In its application, the respondent relies on an alleged demand for redundancy during the grievance process in support of its contention that the claimant was motivated by greed and malice. The claimant denies this. This was not an issue that was put to me nor on which I needed to make a determination or finding at the hearing and even if there were a finding of a demand for redundancy during the grievance process, I conclude that cannot found a claim for costs.

[41]In its application the respondent also relies on warnings given to the claimant prior to issuing the claim, made via Acas that it believes was or would have been relayed to the claimant, that costs would be sought if he pursued a claim and that the bringing of the claim was vexatious. The respondent does not specifically point to conduct on the part of the claimant during the proceedings, save that further costs warnings were given in the ET3 and in Mr Brudenell-Bruce's witness statement to that effect.

[42]On the latter point, I do take note that in its application the respondent’s representative made reference to their understanding that I made findings that the claimant had been untruthful throughout the hearing. Having delivered my oral judgment at the hearing, written reasons have now been provided. As to any such findings, there were findings made on matters that the claimant in evidence said he did not recall and I accepted the evidence of other witnesses, in particular Mr Holloway, as referenced by the claimant himself (above) and occasions where I weighed the evidence from witnesses and in the bundle of documents, and in the absence of additional supporting evidence on a given issue, made findings on the balance of and taking account of all of the evidence before me. I weighed the evidence in the balance and reached my conclusions on the balance of probability and made no express findings that the claimant had been ‘untruthful throughout the hearing’.

[43]In applying the law (Attorney General v Barker summarised above) as to the hallmark of vexatious proceedings, I also take account of the fact that the claimant is a litigant in person and was unrepresented. In bringing his claims and in his conduct of the proceedings, including his evidence at the hearing and taking account of the written representations by both parties in this application, I find no Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017 basis for the respondent’s contention that the claimant's claim was motivated by ‘greed and malice’. Furthermore, in the circumstances of the claimant’s claims for constructive dismissal due to a loss of trust and confidence and for breach of contract for the loss of 4 weeks’ pay, I do not conclude that they had little or no discernible basis in law, nor that in having to defend the claims the effect on the respondent was out of all proportion to any possible gain to the claimant. Accordingly, I conclude that the claimant did not act vexatiously in the bringing or conduct of proceedings and that s.76(1)(a) is not engaged. Did the claim have no reasonable prospects of success (rule 76 (1) (b) of the ET Rules)?

[44]In considering this question, I must consider that whether the claim had no reasonable prospect of success is judged on the basis of the information that was known or reasonably available at the start and taking account of the EAT’s guidance in Radia above.

[45]The respondent contends in its application that the claimant sought legal advice prior to bringing proceedings, that he was ‘most probably’ not represented because he was told he did not have reasonable prospects of success and that Acas told him he had a 50/50 chance of success. The claimant disputes this. I find no basis for the respondent's assumption as to any advice given to the claimant and I accept the claimant's submission that he was not represented because of the cost. I also accept his explanation that Acas may have referred generally to prospects in unfair dismissal cases being 50/50 rather than to his case specifically. Acas has a clearly defined role in early conciliation and does not act as an advisor to either of the parties on the merits of a claim. I accept the claimant’s submission that he was not advised that he did not have a reasonable claim and that if he believed his claim was not reasonable he would not have proceeded with a

claim.

[46]In its application the respondent also makes the submission, with reference to Mr Brudenell-Bruce's witness statement, that the claim never had any prospect of succeeding as the 2018 Contract allows for layoff and the claimant knew full well that layoff and short term working were custom and practice.

[47]Whilst the ability or otherwise of the respondent to layoff the claimant in reliance on the 2018 Contract and/or according to custom and practice was a fundamental issue in the claim, in identifying the issues in the claim at the outset of the hearing, his constructive dismissal claim was based on whether the respondent’s actions breached the implied term of trust and confidence, the loss of which, following the layoff and raising of a grievance, was relied on by the claimant in his claim form.

[48]Given that the 2018 Contract was unsigned and it was disputed by the claimant that it was finalised and in effect, determination of this issue was largely based on witness evidence from the claimant and Mr Holloway in relation to events in or around May 2019 and reference to subsequent verbally agreed but undocumented changes in 2020, and on close examination of an unsigned but marked up copy of the 2018 Contract. There was little other corroborating documentation.

[49]Having weighed the evidence, I found in favour of the respondent on this issue, though note that I necessarily weighed very carefully the reliance on an unsigned contract by the respondent in circumstances where the offending term did not have immediate effect.

[50]Although it was not necessary to do so, I also noted in my judgment that I would have found in favour of the respondent in their alternative argument that there was a custom and practice of invoking layoff and short time work over the years. Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017

[51]In light of the above, in determining the issue as to whether therefore, the respondent’s actions breached the implied term of trust and confidence, so as to found a claim of constructive dismissal, I made findings that as layoff was expressly provided for in the 2018 Contract and that notifying the claimant in writing in advance was reasonable in the circumstances, the respondent’s actions had not breached the implied term of trust and confidence.

[52]However, in considering the claim and response at the outset and the facts as found and in deciding whether the claim had no reasonable prospects of success, I must also ask myself what the claimant knew or ought reasonably to have known were the facts at the outset and what view of the prospects he ought reasonably to have formed based on the

facts.

[53]I conclude that the respondent’s contention that there were no reasonable prospects of success because the 2018 Contract allows for layoff and the claimant knew full well that layoff and short time working were custom and practice, is not necessarily so. As a constructive dismissal and breach of contract claim the relevant findings of fact have to be made and the facts determined by me on this issue, were in large part determined on weighing in the balance witness evidence at the hearing from the claimant and Mr Holloway respectively. As set out above, in the absence of a signed contract, the respondent’s reliance on the same and the application of the law in this regard was not cut and dried and the facts found and issue was not bound to be determined in its favour. Neither was the outcome in reliance on a defence of custom and practice.

[54]The claimant advanced his case on the basis of a loss of trust and confidence following the layoff and although the claimant's claims ultimately were not successful, I do not conclude that the claimant knew or ought reasonably to have formed the view that his claim had no reasonable prospects of success from the outset.

[55]Based on the claims asserted and on the issues and conclusions drawn above, overall I do not conclude that the claim had no reasonable prospects of success and therefore s.76(1)(b) is not engaged. If either section above is engaged, in the Tribunal’s discretion, should a costs order be made?

[56]Although I have found that s.76(1)(a) and s.76(1)(b) are not engaged, and am not required to go further, whether I should award costs is a discretionary decision and is an exception and not the rule. In this case I would go on to say that if I had found that s.76(1)(b) was engaged, I would not have exercised my discretion to award costs based on the prospects of success of the claimant’s constructive dismissal claim or his breach of contract claim. The claims pursued were not so outside the scope of an arguable case that may be brought before the tribunal by an unrepresented claimant. Neither is it an unusual occurrence in tribunal proceedings for an unrepresented claimant to pursue arguments which ultimately, after hearing the case, turn out not to have had much prospect of succeeding. I would not have awarded costs on that basis in this case based on the claimant’s case that he resigned due to a loss of trust and confidence, a claim that in the circumstances was not an unreasonable case to pursue for the reasons outlined above and one which I note the claimant was keen to settle through Acas conciliation but with which the respondent chose not to engage, given its view the claim was based on greed and malice, for which I found no basis.

[57]Having considered the submissions made carefully and taking account of the Rules, the Presidential Guidance and the case authorities and relevant factors, the respondent’s application for costs is refused for the reasons above. Case No: 3300459/2022 10.7 Judgment with reasons – rule 62 March 2017