Ms K Herbert v Main Group Services Ltd: 3310773/2022
EMPLOYMENT TRIBUNALS
Case No 3310773/2022
Between
Ms K HerbertClaimantMain Group Services LtdRespondent
Before
Employment Judge BoyesMr Searle (instructed by counsel) for claimantDate 27 June 2023
JUDGMENT
The claimant’s unfair dismissal claim is well founded. The claimant was unfairly dismissed. The claimant was summarily dismissed in breach of contract. The claimant is entitled to damages equivalent to one month’s salary for breach of contract. The claimant’s holiday pay claim is dismissed. The claimant’s written statement of particulars of employment did not fully comply with the requirements of section 1 of the Employment Rights Act 1996. The claimant is awarded compensation of two week’s pay. There will be a further hearing (1 day) to determine remedy. This will include consideration of whether any award should be reduced for any contributory conduct on the part of the claimant, whether a Polkey reduction should apply and whether there should be any adjustment relating to the Acas Code of Conduct.
REASONS
[1]The claimant claims unfair dismissal and that she is owed notice pay and holiday pay. The respondent denies all claims. The Proceedings/Hearing[2]After a period of early conciliation through ACAS from 2 June 2022 to 17 June 2022, the claim form (ET1) was lodged with Tribunal on the 17 August 2022.[3]The respondent filed a response to the claim (ET3).[4]The claimant gave evidence. She adopted her witness statement. She was cross examined by the respondent and asked questions by me.[5]The claimant called one further witness, Donna Anderson (by video). She is the claimant’s sister. She adopted her witness statement. She was cross examined by the respondent and asked questions by me.[6]The respondent called two witnesses. These were Thomas Swannell, Operations Manager, and Anna Swannell, Managing Director. Both was cross examined by the claimant and asked questions by me.[7]During cross examination Thomas Swannell was asked about a previous conviction. Ms Ralph objected on the basis that it was a spent conviction. There was no basis for such an objection as the respondent had introduced character evidence both in the statements provide and in live evidence. In any event, I had no regard to Mr Swannell’s conviction when weighing the evidence before me. The events leading up to that conviction were not in a workplace environment and occurred in an entirely different context.[8]There was a significant number of documents in the trial bundle the relevance of which was not apparent. At the commencement of the hearing, I made both parties aware that if any particular document was not referred to in a witness statement or its relevance explained to me then I was not going to have regard to it. Both parties made oral closing submissions.[10]I reserved Judgment as there was not sufficient time for judgement and reasons to be given on the day of the hearing. Documents[11]As well as the documents held on the Tribunal file, the Tribunal had before it a bundle (prepared by the claimant) of 353 pages. There were also statements from two individuals, Leanne Regan (Mr & Mrs Swannell’s niece) and Ruth Dyer (a former employee). These individuals were referred to as character witnesses. Neither gave live evidence before the Tribunal. Issues to be determined[12]The issues that the Tribunal is required to decide are: i. On what date was the claimant dismissed ii. It is not disputed that the claimant was dismissed. However, there is a dispute as to the date of dismissal (20 May 2022 or 22 July 2022). iii. What was the reason or main reason for dismissal. The respondent says the reason was conduct. The Tribunal will need to decide whether the respondent genuinely believed the claimant had committed misconduct. iv. If the reason for dismissal was misconduct, did the respondent act reasonably in all the circumstances in treating that as a sufficient reason to dismiss the claimant? The Tribunal will usually decide, in particular, whether: -there were reasonable grounds for that belief; -at the time the belief was formed the respondent had carried out a reasonable investigation; -the respondent otherwise acted in a procedurally fair manner; -the dismissal was within the range of reasonable responses. Wrongful dismissal / Notice pay i. What was the claimant’s notice period? ii. Did the respondent dismiss the claimant with immediate effect on 20 May iii. Was that a breach of contract? iv. Was the claimant paid for that notice period? v. If not, was the claimant guilty of gross misconduct or did the claimant do something so serious that the respondent was entitled to dismiss without notice? i. Did the respondent fail to pay the claimant for annual leave the claimant had accrued, but had not been taken, when their employment ended taking into account the following: -What was the claimant’s leave year? -How much of the leave year had passed when the claimant’s employment ended? -How much leave had accrued for the year by that date? -How much paid leave had the claimant taken in the year? -Were any days carried over from previous holiday years? -How many days, if any, remain unpaid?
Findings of Fact
[13]Where there is no dispute between the parties as to a particular fact, my findings of fact are recorded below without any further explanation. Where the facts are not agreed by both parties, I have explained why I prefer one party’s account over the other. Where the facts are not clear, I have explained why I have made the finding of fact concerned.[14]My findings of fact are as follows: The respondent[15]The respondent is a scaffolding and brickwork company, offering Commercial Scaffolding and Brickwork Services across the UK. The claimant’s managers were Thomas Swannell, Operations Manager, and Anna Swannell, Managing Director. Mr and Mrs Swannell are the claimant’s brother-in-law and sister-inlaw. Anna Swannell is the claimant’s husband’s sister. At the time that the ET3 was completed the respondent had six employees. The claimant[16]The claimant commenced employment with the respondent on 28 October 2018. The claimant was employed by the respondent in the role of Office Manager. The claimant was initially contracted to 35 hours a week, from 8:30 to 16:30 Monday to Friday. In 2019, however, the claimant requested her working hours be changed to 8:30 to 16:00. The respondent agreed to this change. There was no change made to the claimant’s salary.[17]The claimant’s role included: day to day running of the office; overseeing accounts; overseeing health and safety requirements and ISO standards; overseeing payroll; overseeing finances; arranging meetings; working with the sales and purchase ledgers; working with administration staff and individuals across the business at all levels; and covering office duties in the absence of administration staff.[18]There is a dispute between the parties as to the end date of the claimant’s employment. The claimant asserts that it ended on the 20 May 2022. The respondent asserts that it ended on the 22 July 2022. I make my finding in this respect below. Terms and Conditions of Employment[19]On the 17 July 2018 there was an email exchange between the claimant and Anna Swannell about the key terms of the claimant employment.[20]The claimant states that she first received a contract of employment on the 2 October 2019. The respondent states that the claimant was provided with a contract of employment immediately upon the commencement of her employment. Therefore, the respondent’s position is that the contract of the 2 October 2019 is the second contract that the claimant signed. Anna Swannell stated in live evidence that the claimant thought that the original contracts were too basic so were re-done. She confirmed that the respondent does not have a copy of the first contract.[21]There are two parts to the claimant’s contract, a Schedule [328] and the main body of the contract [327, 329-345].[22]The front page of the contract [327] says “Issue Oct 19”. At section 1.1 it states “This contract of employment is made this 28th Oct 2018…” The contract is signed by Anna Swannell and the claimant on the 2 October 2019.[23]Under the claimant’s contract of employment dated 2 October 2019, the respondent was required to give the claimant one month’s notice of the termination of her employment.[24]In the schedule before the Tribunal it also states that the Sick Pay was “Full pay (as agreed)”.[25]In the schedule it refers to Thomas Swannell as the person that the claimant reports to.[26]Section 15 and 16 of the contract deal with disciplinary rules and unsatisfactory work and misconduct. Sections 18, 19 and 20 specify the respondent’s disciplinary procedures. Section 21 details the appeals procedure. The grievance procedure and grievance appeal procedure are laid out at section 22.[27]A non exhaustive list of types of conduct which may amount to gross or serious misconduct can be found at section 15.1. At 15.1.10 it includes “rudeness or insubordination to any of its customers or any conduct which may put at risk the employer/customer relationship”. At 15.1.12 it includes “persistent disobedience, without cause, of reasonable instructions, given by the company”.[28]At section 16 there is a list of the type of conduct or unsatisfactory work that may lead to dismissal after a prior warning has been given. There is a non exhaustive list of examples which include negligence, carelessness or general lack of capability in performance of the employees duties, bad timekeeping and the provocative use of insulting or abusive language.[29]There is also an employee handbook [261-322] which provides further examples of gross misconduct, the disciplinary/capability procedure and appeal procedure. In respect of the disciplinary procedure it is explicitly stated that this does not form part of employee’s terms and conditions of employment. The list of examples that would ordinarily be deemed serious enough to constitute gross misconduct includes “serious instances of: […]Serious cases of bullying, aggressive, threatening or intimidating behaviour or excessive bad language” Chronology of Events[30]As a result of the first national lockdown due to the coronavirus pandemic, the respondent placed the claimant on furlough leave under the Coronavirus Job Retention Scheme from March 2020 until 30 September 2021.[31]Over the period 12 March 2021 to 20 October 2021, the claimant made nine separate loans to the respondent ranging from £3,000 to £15,000. These loans were to assist the respondent with cashflow. They were repaid.[32]In November 2021, the claimant was informed by the respondent that she would no longer be entitled to receive enhanced company sick pay pursuant to the contract.[33]In December 2021, the claimant agreed to take a salary reduction from £40,000 to £35,000 for a period of six months.[34]On 13 May 2022, the claimant accessed a digital copy of her contract of employment on the respondent’s system. This was done without the knowledge of the respondent. She amended the section entitled ‘Rate of Pay’ so as to read “£35,000.00 (reduction from Dec 2021 for 6 months) then back to £40,000”. The claimant denies making any other amendments. She states that she did notice that the schedule still referred to her being entitled to full pay during periods of sickness absence. She states that as she had not received any written correspondent about this and had received full pay when she was absent from work due to Covid she concluded that the change had not been implemented and therefore left the wording in the contract.[35]The respondent asserts that there was also a paper copy of the schedule which had handwritten amendment. As I understand it (and the evidence before me in this respect unclear) the amendment that was made was to confirm that the claimant was no longer entitled to full pay when she was sick. The respondent’s position is that this paper document can no longer be found.[36]The evidence before me regarding the various versions of the claimant’s contract was far from clear. On balance, I accept that there was a copy of the schedule which had handwritten amendments on it confirming that the claimant was no longer entitled to full pay when sick. However, I am not persuaded, on the evidence before me, that that document was disposed of by the claimant as was suggested by Anna Swannell. There is no evidence to suggest that this was the case.[37]Having considered all of the evidence before me in the round, I did not form the view that the claimant had amended her contract so as to give the impression that she was still entitled to full sick pay. Indeed, it is the respondent’s evidence that the amendment removing full sick pay was recorded by hand. It is not suggested that the digital version recorded the removal of full pay when sick. Others knew about this change in any event. It seems to me more likely that she accessed the document in order to record that her reduction in salary was a temporary rather than permanent change.[38]The claimant states that, on 20 May 2022, she was in the office with Thomas Ball, a self-employed bricklayer who managed the brickwork side of the business and Anna Swannell. They were searching for a disc for the tachograph programme in order to upload it onto staff computers and, as part of the search, she asked Anna Swannell whether she could look through Thomas Swannell’s desk drawers. Anna Swannell agreed. When inspecting the desk drawers, she discovered notes and documentation setting out the cost of her employment to the business.[39]The claimant states that she did not tell anyone that she had found the documentation but found it extremely upsetting. She says that she also felt angry at the prospect of her role being terminated and often when she is angry, she begins to cry. She denies the allegation made by the respondent that she kicked and hit the printer or that she was shouting and screaming.[40]The claimant’s version of events is disputed by the respondent. The respondent’s position is that after Anna Swannell had finished for the day, she was informed by a sub-contractor who works in the office that the claimant unexpectedly lost her temper earlier in the day and began shouting/screaming. The sub-contractor also informed her that the claimant caused some damage to the printer by kicking it. Other concerns raised by the sub-contractor regarding the claimant included her behaviour in a professional environment, lack of care and attention to detail in her work, and refusing to carry out daily tasks that fell within her remit.[41]On 20 May 2022, at around 4.10pm, the claimant received a telephone call from Thomas Swannell who requested that she attend a meeting with him in the office early on Monday 23 May 2022 before any other members of staff arrived. She says that he explained that he wanted to discuss a few topics but did not provide any detail or mention Anna Swannell’s involvement.[42]The claimant telephoned Thomas Swannell at around 4.15pm to request that the meeting take place that day. She claims that this was because she is a worrier and that she knew that she would be unable to enjoy her weekend otherwise. She was worried that her employment was going to be terminated because of the documentation that she had found in Thomas Swannell’s desk.[43]The meeting therefore took place between Mr Swannell and the claimant at the respondent’s offices at or just after 4.30pm on the 20 May 2022. Anna Swannell could not attend the meeting as she had caring responsibilities. There is a dispute between the parties as to what was said and what occurred during that meeting.[44]The claimant asserts that during the Meeting, Mr Swannell stated that he was not happy with the claimant’s management of the office, namely that there were issues with ‘bookings’, suppliers were not being paid on time and he was unaware of the current cash flow of the company. She says that during the meeting he telephoned Anna Swannell to check whether something that the claimant had said in response to one of his concerns was correct. Further he stated that the claimant had been distracted at work as a result of spending too much time on her telephone.[45]The claimant asserts that in response to these allegations, she told Thomas Swannell that a number of these responsibilities did not form part of her job role. She says that she told Thomas Swannell that he was unable to take responsibility or admit wrongdoing.[46]The claimant states that it was the first time that any concerns had been raised with her in relation to her performance. She asserts that the atmosphere in the meeting became very heated and that Thomas Swannell had an aggressive demeanour and refused to acknowledge her point of view. She therefore began to cry. She says that Thomas Scannell then asked her what they could do to sort out the situation to which she replied that it was his decision as it was his business. She says that he then approached where she was sitting, placed both hands on the desk and stated that he thought the world of her. She states that she confirmed her commitment to the respondent and then said “if it was anyone else in this position they would have walked years ago due to the goings on in the office, but it is only because of you two dickheads [in reference to Thomas and Anna Swannell] that I stayed”.[47]The claimant’s position is that this comment was a joke and was commensurate with the manner in which the claimant and Mr Swannell would normally communicate with each other.[48]The claimant says that Thomas Swannell then responded “don’t call me a fucking dickhead or my wife”. She says that she attempted to explain to Thomas Swannell that the comment had only been a joke with reference to Thomas and Anna Swannell being her in-laws. She states that, in response, Thomas Swannell proceeded to dismiss the claimant without notice stating “that’s it you’re sacked, pack your kit and fuck off”. She says that she asked Thomas Swannell to confirm whether he had terminated her employment with the respondent to which Thomas Swannell confirmed “yes I have now fuck off”. She says that she then took items from her desk and left her office keys with Thomas Swannell.[49]The respondent’s position regarding what happened at the meeting, as per Thomas Swannell’s evidence, is as follows. In his witness statement he states that on returning to the office he noted a strange atmosphere and the claimant became very defensive. He says that as the meeting began, she was stabbing a pencil into a notepad. He states that he started to speak to her about an incident with a contractor that had happened earlier in the day, and she just began to shout and stamp her feet. Further into the conversation, he called Anna Swannell to ask her a question, as the claimant alleged she had told her not to do a task. He had asked the claimant to do this task, so she alleged to have conflicting instructions from them. Anna Swannell denied that she had told the claimant not to carry out the task. He states that at this point, the claimant started to scream and hit her head with her hand. He says that Anna Swannell was still on the telephone and heard all of this. She asked him to calm the claimant down, at which point he sat beside the claimant and asked her what they could do to help her personally and professionally. Rather than responding rationally, she screamed “I'm not upset, I'm fucking mad”.[50]He states that, after this, the claimant admitted that she had been taking far too many personal phone calls whilst at work. He states that he raised various other issues including the amount of time she was absent from the office during her working day to walk her dogs, issues raised about the claimant by companies they work with, how she was treating other employees within the Company, as well as the administrative errors that kept reoccurring. He states that the claimant refused to take any responsibility for her actions.[51]He asked the claimant why she was not fulfilling very simple tasks that were required of her, such as chasing owed monies from clients. He states that the claimant became irate and started to shout, “Who would work for a pair of knobheads?” to which he replied “I beg your pardon”. He says that he told her that this was a completely inappropriate and unprofessional statement and that he felt shocked by her remark. He says that she then responded by screaming “I didn't mean that, I meant fucking dickheads”. He then suggested that they left the conversation there to allow her some time to calm down over the weekend.[52]In live evidence, Thomas Swannell denied that he had told the claimant that she was dismissed. He did ask her to leave her key because he did not have his key and so asked her to leave her key. He said that this is not unusual because he never has his keys; he is always losing them. He confirmed that she did take the dog beds with her but he had mentioned the issues with having the dogs at work so this was not because she had been dismissed.[53]In her witness statement, Anna Swannell makes no reference to witnessing what was said at the meeting on the 20 May 2023. The first time this is referred to is in the document at page 250-351. It is accepted by the claimant that Thomas Swannell telephoned Anna Swannell during that meeting but not that she was privy to the conversation afterwards. Whilst Anna Swannell says in her witness statement at paragraph 14 that that the claimant became irate and used inappropriate language which was not in jest, it does not say in her in her statement that the claimant started to scream and hit her head or that she witnessed the conversation more generally.[54]There is a document entitled ‘Tom Swannell - witness statement’ [350-351] which is dated 20 May 2022. The claimant challenges the reliability of this document. This is because it was not disclosed to the claimant prior to the institution of proceedings.[55]In live evidence, Anna Swannell stated that her husband wrote the statement by hand and then she typed it as a Word document. It was then printed off but she did not save it. It was sent to the respondent’s representatives as a PDF. She was asked how it became a PDF document and she replied that she dragged and dropped it to an email but did not save it. As I understand her evidence on this point, which was somewhat confusing, she copy typed it for a second time in order to provide a copy for the disciplinary proceedings.[56]In live evidence, Thomas Swannell stated that after the meeting he made a note of what was said. He was asked where those handwritten notes were and he stated that they in the office and he did not think that they were important for the Tribunal.[57]No meta data has been provided to show when the document was created or printed off either in Word or PDF. There is no reference whatsoever to the document in the investigation or disciplinary proceedings. The claimant states that she had never seen the statement until it was disclosed during the course of these proceedings. I would have expected the document to have been disclosed during the course of disciplinary proceedings had it been in existence at that time. For those reasons I do not consider it to be a reliable document nor am I satisfied that it was created on the 20 May 2023.[58]I prefer the claimant’s account of what happened at the meeting on the 20 May 2022. In particular I accept and find as a fact that Thomas Scannell said to her “don’t call me a fucking dickhead or my wife”, “that’s it you’re sacked, pack your kit and fuck off”, and when the claimant asked if he had terminated her employment he replied “yes I have now fuck off”.[59]I prefer the claimant’s account to the account given by the respondent’s witnesses because the claimant’s account of what occurred on that date has been entirely consistent throughout including during her evidence to this Tribunal. The claimant documented her account of what occurred in the meeting soon afterwards in an email to the respondent. That account is entirely consistent with the claimant’s account in evidence before the Tribunal. Further, I found the claimant’s sister’s account of her telephone conversation with the claimant, after the meeting of the 20 May 2022, to be credible.[60]Further, I do not consider the statement of Thomas Swannell dated the 20 May 2023 to be a reliable document for reasons that I have provided above. This casts doubt on the reliability of his account of what occurred on that date.[61]Further the account given by Thomas Swannell at the meeting makes no reference to the claimant being suspended during that meeting. At paragraph 4 of his witness statement it says “I suggested we left the conversation there to allow her some time to calm down over the weekend”. His statement at 350-351 says similar. Again there is no reference to the claimant being suspended. Anna Swannell says in her witness statement at paragraph 14 that Thomas Swannell became very uncomfortable, asked the claimant to leave the premises and told her that the matter would be dealt with on the Managing Director’s return. It is therefore very surprising that the claimant was later sent a letter on the 1 June 2022 [74] which states that she was “verbally suspended from [her] employment pending investigation into the rude and objectionable behaviour and language that you exhibited during the conversation.” This contradiction in the evidence casts further doubt over the reliability of what is said by the respondent’s witnesses as to what occurred on the 20 May 2023.[62]The claimant has not returned to the office since the meeting of the 20 May 2022.[63]On 23 May 2023, Anna Swannell looked at the claimant’s digital contract of employment. She asked the respondent’s external IT consultant to check the computer system. They identified that the document had been amended and printed out.[64]On 24 May 2022, the claimant sent by email to Anna Swannell a letter dated 21 May 2022 which was also sent by recorded delivery on the same day. The letter records at paragraph 3 on page 2 [69], the claimant’s version of what happened at the meeting.[65]Anna Swannell responded to the claimant by email on the same day stating that the claimant would be “contacted shortly”.[66]On 31 May 2022, having not received a response to her letter of 21 May 2022, the claimant sent a further email to Anna Swannell chasing a response. Anna Swannell responded on the same day stating “This is all in hand you will be contacted next week”.[67]As referred to above, on 1 June 2022, the claimant received a letter from the respondent entitled “Suspension From Work”. As well as explaining that she had been suspended on the 20 May 2022, the letter states that an investigation will be undertaken and that the claimant will either be informed of when a disciplinary hearing will take place or, if no action is taken, be informed that she can return to work.[68]On 6 June 2022, the claimant responded to the suspension letter by email to Anna Swannell attaching a ‘response to suspension letter’ dated the same day, denying that she had been suspended, reiterating that she had been dismissed by Thomas Swannell during the meeting and that the respondent’s actions was an attempt by the respondent to “back track” and try to “reinstate [her] through the back door”. The claimant stated that she had been to see her GP for stress and anxiety.[69]On 21 June 2022, the claimant’s representative wrote by letter to the respondent asserting that the claimant had been dismissed during the Meeting. There was no response to this letter.[70]On 23 June 2022, the respondent wrote to the claimant to invite her to a disciplinary hearing on 27 June 2022 to “discuss some concerns” the respondent had about the claimant’s conduct.[71]The claimant’s representative replied on the 24 June 2022, reiterated the claimant’s position that she had been dismissed and stated that she would therefore not be participating in the disciplinary investigation. It was asserted that the disciplinary investigation was a “bogus disciplinary investigation” and “a crude attempt to retrospectively alter the sequence of events”.[72]The claimant received an email from Helen Pearson, Human Resources Consultant, Croner, on 27 June 2022 inviting the claimant to a video meeting to be conducted via Teams.[73]The claimant’s representative subsequently responded to Ms Pearson on 27 June 2022 stating that as the claimant was no longer an employee she would not be participating in any disciplinary procedure. Later that day, Ms Pearson emailed the claimant requesting the claimant’s written submissions in respect of a number of matters, that is raising invoices, chasing outstanding debtors, payment matrixes, notification of sick pay and holiday pay, the issuing of staff contracts, when the last changes were made to her contract and by whom and relating to verbal agreements regarding changes to her salary and sick pay. There is no mention of the events of 20 May 2022.[74]On 30 June 2022, the claimant received a further email from Ms Pearson chasing the claimant’s written submissions.[75]The claimant received her salary for June on 1 July 2022. This was subsequently returned by the claimant to the respondent on the same day.[76]The claimant’s representative wrote to Ms Pearson on 1 July 2022, reiterating the claimant’s position.[77]On 11 July 2022, the claimant and her representative received a letter, by email and by post, from Anna Swannell inviting the claimant to a formal disciplinary hearing on 14 July 2022 at 09:30am. An investigation report prepared by Croner Face2Face was also provided. In the ‘overview section’ [80] it states “The concerns raised by the Employer initially related to H’s behaviour in the workplace, however a number of concerns have subsequently come to light, namely: Failure to chase outstanding debtors & pay suppliers in a timely manner Incorrect Invoicing resulting in delay receiving payments KH amending her contract of employment without authorisation”[78]The outcome of the investigation was that in each respect there was a case to answer and so the matter should proceed to a disciplinary hearing.[79]On 13 July 2022, the claimant received an email from Lisa Baynes, HR Consultant at Croner Face2Face providing a video link to the disciplinary hearing.[80]On 18 July 2022, the claimant received an email from Anna Swannell attaching a letter confirming that the disciplinary hearing had been postponed until 21 July 2022 to enable the claimant to attend. The claimant emailed Anna Swannell on the same day reiterating her position that she had been dismissed at the meeting on 20 May 2022.[81]On 22 July 2022, the claimant received an email from Anna Swannell attaching an 18 page disciplinary report prepared by Croner Face2Face and a letter confirming the claimant’s summary dismissal for gross misconduct.[82]The disciplinary report upheld the three allegations against the claimant and alleged that the claimant was an employee at the time of the disciplinary process for the following reasons: -The claimant had not provided evidence that the claimant had been dismissed. -The claimant had been paid throughout the disciplinary process. -The respondent had followed their disciplinary procedure. -The claimant had not appealed against her dismissal on 1 June 2022, nor has she raised a grievance.[83]Anna Swannell wrote to the claimant on the 22 July 2022 to state that she was to be summarily dismissed. The reasons provided were as follows: “-You have failed to provide an acceptable explanation to any of the allegations - I believe that you have displayed unsatisfactory standards of work namely that the Company has received complaints from customers with regard to the standard of your work in that you failed to pay a supplier - I believe that you have displayed unsatisfactory standards of work, namely that the Company has received complaints from customers with regard to the standard of your work and attention to detail - I believe that on 13th May 2022 you amended the terms of your contract of employment to more favourable terms without prior authorisation. Examples being but are not limited to, amending the terms of your contract to state that you are to receive an enhanced sick pay package prior to your planned operation in 2022. - Furthermore. that this behaviour has resulted in a fundamental breach of contractual terms that irrevocably destroys the trust and confidence necessary to continue the employment relationship, and that it constitutes gross misconduct. - I have been mindful of your long service with the Company - In mitigation, I have taken into consideration the fact that you had several personal circumstances during your employment that impacted your performance and as a company we stand by the fact that our approach towards yourself was consistently fair and supportive.”[84]The letter also states that the claimant has a right of appeal against the decision. The claimant did not appeal against the decision because she stated that the disciplinary process was a sham.[85]On 25 July 2022, the respondent sent to the claimant by email her P45, a payslip detailing a final payment of £6,817.78 (which included a payment in lieu of 37.5 days accrued holiday entitlement) and a reference. The claimant’s conduct/capability[86]There is nothing in the evidence before the Tribunal to indicate that any form of disciplinary proceedings had been taken against the claimant prior to her dismissal. I find that the claimant has not been subject previously to disciplinary proceedings or given any warnings.[87]On the evidence before me, I accept that the respondent had some issues that it wanted to raise with the claimant regarding certain aspects of her work.[88]Thomas Swannell stated that the intention was to have an informal chat on 23 May 2023 so there were clearly matters that the respondent wanted to discuss. Some were raised in the meeting of the 20 May 2022.[89]However, in view of my findings above, the reason for the claimant’s dismissal on the 20 May 2023 was the claimant’s critical and intemperate comment about Thomas Swannell and Anna Swannell.[90]It is clear from the documentary evidence before the Tribunal that the performance related issues referred to in the investigation and disciplinary report, and relied upon by the respondent as the reasons for dismissing the claimant, were only actually raised with the claimant after the 20 May 2022. These issues were therefore only raised after the claimant was dismissed.[91]The claimant holiday entitlement was 28 days per year plus bank holidays. The company holiday year runs from January to December of each year. There is no contractual provision for the carrying over of unused leave to the following leave year.[92]The claimant was paid 37.5 days in lieu of accrued holiday on the termination of her employment. This is broken down on the payslip for July 2022 in to 2.5 days for 2020, 28 days holiday for 2021 and 7 days holiday for 2022. The claimant states that she had accrued 56 days holiday at the date of dismissal. The claimant asserts that she is owed pay in lieu for an additional 18.5 days accrued leave for 2020 and 7 days accrued leave for 2022 [Schedule of Loss - 140-141].[93]The claimant does not assert that she is owed any accrued leave for 2021.[94]For the holiday year of 2022 the claimant took 7 days holiday [259]. For the period 1 January 2022 to 20 May 2022 her pro rata leave entitlement was 10.8 days. She was paid for 7 days accrued but untaken leave on termination. She was therefore paid in excess of her accrued entitlement by 3.2 days.[95]There is a dispute between the parties as to what annual leave the claimant used in 2020. The respondent’s position is that by the point that the claimant was furloughed in 2020 she had already used most of her holiday entitlement between January and March 2020; she had only 2.5 days remaining.[96]The dispute is not about whether or not the claimant was absent from work during this period but rather whether the time that the claimant took off in January to March 2020 constituted holiday rather than some other form of paid leave. Anna Swannell’s evidence is that the claimant was absent for six weeks in 2020 when her mother was ill and subsequently passed away. Three days of these days were classed as bereavement leave and the remainder was holiday. The claimant’s position is that there was no agreement that the time she took off was to be taken as holiday. In live evidence, Anna Swannell stated that during a telephone conversation that she had with the claimant, the claimant indicated that she would use her holiday entitlement during that period and she confirmed that that was fine.[97]I prefer Anna Swannell’s evidence in this respect. I consider it unlikely that the claimant would have expected to be paid for such an extended period on some unspecified basis rather than utilise her holiday entitlement.[98]I find that the claimant had 2.5 days accrued but unused holiday left in 2020 and that she was paid in lieu of this sum upon the termination of her employment. The Relevant Law Date of dismissal
The Relevant Law
[99]In this case there is a dispute as to whether or not the claimant was dismissed on the 20 May 2022. Where there is a dispute as to whether or not an individual was dismissed, the burden of proof in terms of demonstrating that there was dismissal in the circumstances claimed falls upon the employee.[100]The general principle is that once notice has been given by the employer to the employee to terminate the contract of employment it cannot be withdrawn by the employer, only by agreement between the employer and employee (Harris and Russell Ltd v Slingsby 1973 ICR 454, NIRC).[101]In exceptional circumstances, such as when the words spoken in anger were immediately withdrawn, then there may be no dismissal (Martin v Yeomen Aggregates Ltd 1983 ICR 314, EAT).[102]The question of whether or not an individual was unfairly dismissed is a two stage process. The first stage is that it is for the respondent to show a potentially fair reason for dismissal, and secondly, if that is done, the question then arises as to whether the dismissal is fair or unfair.[103]The reason for the dismissal and the reasonableness of the dismissal is based on the facts or beliefs known to the employer at the time of the dismissal (as per W Devis and Sons Ltd v Atkins 1977 ICR 662, HL). However, a Tribunal should consider facts that came to light during the appeal in considering whether the employer’s decision to dismiss was reasonable (as per West Midlands Cooperative Society Ltd v Tipton 1986 ICR 192, HL).[104]In an unfair dismissal case in which the employee had been employed for two years and no automatically unfair reason is asserted, the burden lies on the employer to show what the reason or principal reason for dismissal was, and that it was a potentially fair reason under section 98(2) of the Employment Rights Act 1996 (“ERA”). Once that is done there is no burden on either party to prove fairness/unfairness. Reason for dismissal[105]Section 98(2) ERA identifies a number of potentially fair reasons for dismissal which include conduct. In this case, the respondent says that the claimant was dismissed because of her conduct, although capability issues were also raised. Fairness[106]Section 98(4) ERA specifies the test to be applied by the Tribunal in order to determine whether a dismissal is fair or unfair. It reads as follows: “Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) - (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.”[107]In conduct dismissals, there is well-established guidance for Tribunals on the approach to be taken when assessing fairness under section 98(4). This can be found in the cases of British Home Stores v Burchell 1978 IRLR 379 and Post Office v Foley 2000 IRLR 827. The Tribunal must decide whether the employer had a genuine belief in the employee’s misconduct. The Tribunal must then decide whether the employer held such genuine belief on reasonable grounds after carrying out a reasonable investigation. The Tribunal must decide whether the employer acted within the band or range of reasonable responses open to an employer in the circumstances. The Tribunal must take in to account all aspects of the case including the investigation, the grounds for belief, the penalty imposed, and the procedure followed, in deciding whether the employer acted reasonably or unreasonably within section 98(4).[108]It is immaterial how the Tribunal would have handled the events or what decision it would have made, and the Tribunal must not substitute its view for that of the reasonable employer (Iceland Frozen Foods Limited v Jones 1982 IRLR 439, Sainsbury’s Supermarkets Limited v Hitt 2003 IRLR 23, and London Ambulance Service NHS Trust v Small 2009 IRLR 563).[109]In considering the fairness of the dismissal, the appeal should be treated as part and parcel of the dismissal process (Taylor v OCS Group Limited [2006] ICR 1602). The Tribunal’s task under S.98(4) of the ERA, is to assess the fairness of the disciplinary process as a whole. Where procedural deficiencies occur at an early stage, the Tribunal should examine the subsequent appeal hearing, particularly its procedural fairness and thoroughness, and the open-mindedness of the decision-maker.[110]The range of reasonable responses test that applies to substantive unfair dismissal claims must also be used when assessing the reasonableness of the investigation [as per J Sainsbury plc v Hitt 2003 ICR 111, CA].[111]In Newbound v Thames Water Utilities Ltd [2015] IRLR 734 CA, the Court of Appeal stated that Tribunals should not consider the band of reasonable responses as one which is infinitely wide, and to focus on the statutory language and the words "in accordance with equity and the substantial merits of the case” at section" at 98(4)(b) of the ERA.[112]In the unfair dismissal context, a finding of gross misconduct does not automatically mean that dismissal is a reasonable response. An employer should consider whether dismissal would be reasonable after considering any mitigating circumstances [Brito-Babapulle v Ealing Hospital NHS Trust [2013] IRLR 854]. The employee’s length of service and disciplinary record are relevant [Trusthouse Forte (Catering) Limited v Adonis [1984] IRLR 382) as well as the attitude of the employee to his conduct (Paul v East Surrey District Health Authority [1995] IRLR 305]. However, even if the misconduct in question is not correctly characterised as ‘gross misconduct’, this does not necessarily mean that the employer cannot reasonably dismiss [Quintiles Commercial UK Ltd v Barongo EAT 0255/17] Wrongful dismissal[113]An employer will be in breach of contract if they terminate an employee’s contract without the contractual notice to which the employee is entitled, unless the employee has committed a repudiatory/fundamental breach of contract which would entitle the employer to dismiss without notice. A per Laws v London Chronicle (Indicator Newspapers) Ltd 1959 1 WLR 698, CA. for behaviour to amount to a repudiatory breach, it must disclose a deliberate intention to disregard the essential requirements of the contract.[114]A repudiatory breach can include circumstances in which the breach is one that amounts to gross misconduct. Statutory entitlement to holiday[115]Under the Working Time Regulations 1998 (“WTR”) a worker is entitled to 5.6 weeks’ (28 days) annual leave in each leave year [Regulations 13 and 13A WTR]. Regulation 30 WTR 1998 provides for a complaint to an employment Tribunal that the employer has failed to pay the worker the whole or any part of any amount due under Regulations 14(2) or 16(1) WTR.[116]The WTR do not make any provision for carrying forward any unused leave from the 4 weeks’ leave into a following holiday year unless regulation 13(10) applies (see below). Employers and workers can agree to carry over any of the additional 1.6 weeks’ additional statutory leave into the next leave year (but not beyond) by means of a relevant agreement [regulation 13A(7)].[117]The general rule under the WTR is that a worker is only entitled to be paid in lieu of holiday accrued but untaken in the final leave year [regulation 13(9)(a)]. If they only worked part of the final year, they will be entitled to be paid in lieu of such part of the pro rata entitlement that they accrued but did not take as leave.[118]The WTR were amended by The Working Time (Coronavirus) (Amendment) Regulations 2020 on the 26 March 2020 which inserted the following: (10) Where in any leave year it was not reasonably practicable for a worker to take some or all of the leave to which the worker was entitled under this regulation as a result of the effects of coronavirus (including on the worker, the employer or the wider economy or society), the worker shall be entitled to carry forward such untaken leave as provided for in paragraph (11). (11) Leave to which paragraph (10) applies may be carried forward and taken in the two leave years immediately following the leave year in respect of which it was due. (12) An employer may only require a worker not to take leave to which paragraph (10) applies on particular days as provided for in regulation 15(2) where the employer has good reason to do so. […][119]Regulation 17 of the WTR provides that: “17. Entitlements under other provisions Where during any period a worker is entitled to a rest period, rest break or annual leave both under a provisions of these Regulations and under a separate provision (including a provision of his contract), he may not exercise the two rights separately, but may, in taking a rest period, break or leave during that period, take advantage of whichever right is, in any particular respect, the more favourable.”[120]There are exceptions, developed in case law, allowing the 4 weeks’ WTR leave (but not the additional 1.6 weeks’ leave) to be carried over in situations where the worker was unable to take leave such as during sick leave, maternity leave, when prevented from taking that leave by the employer or where the employer has not taken sufficient steps to encourage workers to take their holiday entitlement. MY CONCLUSIONS Date of dismissal[121]It is not disputed that the claimant was dismissed. However, there is a dispute as to the date on which dismissal occurred. For the reasons that I have provided above, I find that the claimant was summarily dismissed on the 20 May 2022.[122]I find that the subsequent investigation and disciplinary proceedings were contrived in order to seek to show that a fair procedure had been followed. I reach this conclusion for the following reasons. Firstly, I have found that the claimant was dismissed on the 20 May 2022. Secondly, the inconsistency in the respondent’s case regarding as to whether or not the claimant was suspended on 20 May 2023 is significant and undermines the reliability of the respondent’s assertions. Further, there is nothing in the evidence before me to suggest that the respondent made any attempt to contact the claimant in the week of the 23 May 2022. This is despite the respondent receiving a letter outlining the claimant’s account of what occurred on the 24 May 2023. If the respondent understood the claimant still to be employed at that juncture, I find that it would have told the claimant this. Instead, there was no substantive response from the respondent to the claimant until the 1 June 2022. Whilst I accept that the respondent was seeking advice during this time, that does not explain why there is no communication from the respondent stating that the claimant had misunderstood the situation and that she had not been dismissed. Reason for the Dismissal[123]When identifying the reason for dismissal, I must first make findings as to the employer’s own reasons for dismissal, and then assess how those reasons should be characterised in terms of the statute.[124]The respondent relies upon misconduct and capability in its letter of dismissal. However, the matters relied upon were not raised with the claimant prior to the 20 May 2023. In particular, on the respondent’s own account, the amendments to the schedule to the claimant’s contract was not discovered by Anna Swannell until the 23 May 2022.[125]The claimant was dismissed summarily on the 20 May 2022 in the heat of the moment because of her behaviour on that date, namely her comments about Anna and Thomas Swannell. I find that the reason for her dismissal on that date was her conduct at that meeting.[126]The respondent has therefore shown that a potentially fair reason for dismissal existed, namely conduct. Given what was said by the claimant in the meeting, I accept that Thoams Swannell would have had a reasonable belief based on reasonable grounds that conduct was the reason for dismissal. Fairness[127]The claimant was summarily dismissed. She made the comment concerned and was immediately told that she was dismissed. The claimant sought clarification from Mr Swannell and he confirmed that he was dismissing her. The company’s disciplinary procedure was not followed.[128]As the claimant was summarily dismissed without any warning and with no attempt whatsoever to follow the disciplinary procedure prior to her dismissal on the 20 May 2022, the dismissal was procedurally unfair. The claimant had no warning that she was to be dismissed and no opportunity whatsoever to state her case before the decision to dismiss was made. On that basis alone the dismissal was unfair within the meaning of section 98(4) of the ERA.[129]Further, on the facts of this case, I do not consider that the respondent acted reasonably in all the circumstances in treating the claimant’s conduct on the 20 May 2022 as a sufficient reason to dismiss her. She made a one off comment to her line manager about him and a director of the business. The commented was made during a heated meeting. Whilst her comment was not acceptable there is no suggestion that she had made such comments previously.[130]Further, whilst not determinative in itself of whether or not the dismissal was unfair, this one off comment did not amount to gross misconduct or misconduct so serious to justify summary dismissal for reasons that I have provided above.[131]Taking into account all of the circumstance of this case, including that the respondent is a small employer but obtains services from an external human resources provider, I find that the respondent acted unreasonably in treating the claimant’s conduct on the 20 May 2022 as a sufficient reason for dismissing her. I do not consider that dismissal in such circumstances was within the range of reasonable responses available to the respondent. Breach of Contract (Wrongful Dismissal)[132]The claimant was not given notice of the termination of her employment nor was she paid in lieu of that notice.[133]The reason for the claimant’s dismissal was the comments that she made to Thomas Swannell at the meeting on the 20 May 2023.[134]Considered in context, I do not find that the claimant’s comments amounted to a repudiation of the whole contract. There is no history in this case of insolence or offensive comments on the part of the claimant. The claimant’s behaviour in making the comments that she did was a one off incident which occurred during a meeting which the claimant had asked to be brought forward because she was anxious about her employment being terminated having, earlier in the day, discovered a document detailing the cost of her employment to the business. Although her comments were inappropriate and regrettable, they did not justify summary dismissal. In essence, the conduct when considered in context was not so serious so as to amount to a repudiatory breach of contract.[135]Further, the claimant’s written contract provides a non exhaustive list of the sort of behaviour that will amount to gross misconduct or serious misconduct warranting summary dismissal. Further examples are given in the employee handbook. In the contract of employment itself, the types of conducted listed as gross misconduct do not include the use of insulting abusive language within the workplace, only rudeness and insubordination towards customers. Notably “provocative use of insulting and abusive language” is behaviour that may justify dismissal after a prior warning is given. The claimant’s behaviour falls squarely within the ‘unsatisfactory work and misconduct’ as identified at section 16 of her contract and not serious or gross misconduct as identified at section 15. The summary dismissal of the claimant was therefore contrary to the terms of the her contract of employment.[136]There is nothing in the employee’s handbook that changes this interpretation. The claimant’s comments were not of such seriousness to be “Serious cases of bullying, aggressive, threatening or intimidating behaviour or excessive bad language”.[137]The claimant was dismissed in breach of contract. The claimant is entitled to be paid damages equivalent to one month’s pay.[138]As per my findings above, on the termination of her employment the claimant was paid in lieu of 2.5 days accrued but unused holiday for 2020. She had used the remainder of her holiday entitlement for that year in January to March 2020 and so is not owed any further sum for that year. For 2022 she was paid for 7 days accrued but unused holiday. As per my findings above she was overpaid for that period by 3.2 days. She is therefore not entitled to any further payment for accrued but unused holiday. Written statement of particulars of employment[139]In contravention of section 1(4)(h) of the ERA, the claimant’s written statement of particulars of the employment did not specify her place of work. I award the claimant two weeks’ pay in respect of this failure.
The Relevant Law
[1]There is no order for reinstatement of re-engagement.[2]The Respondent shall pay compensation of £13,900.81 to the Claimant for unfair dismissal made up as follows:a. A basic award of £2,569.50b. A compensatory award of £11,331.31[3]The Respondent shall pay compensation of £1,142.00 to the Claimant for failure to provide full written particulars of employment.[4]The total compensation to be paid by the Respondent is therefore £15,042.81.[5]There is no separate compensation payable for Wrongful Dismissal as this would result in double recovery.[6]The recoupment provisions do not apply. *The sum awarded for loss of employer pension contributions is awarded gross and so is subject to any income tax and national insurance due on that sum which is to be deducted by the Respondent General matters 1. I apologise to the parties for the delay in providing this Judgment and for any inconvenience that this has caused. 2. The Respondent’s accountants wrote to the Tribunal on the 26 June 2024. They stated that the Respondent had ceased to instruct its previous representatives, had ceased trading on the 30 November 2023 (but had not been wound up) and therefore that the Respondent would not be attending the hearing. Applying rule 47 of The Employment Tribunals Rules of Procedure, I was satisfied that it was appropriate for me to proceed with the remedy hearing in the absence of the Respondent. 3. The amount of the Compensatory Award has been adjusted from the figure given at the remedy hearing to correct an arithmetical error and also because the award for failure to provide full written particulars is capped at a gross weeks’ pay of £571. Calculation of Award Gross weekly pay: £769.23 (reduced to £673.08 for six months from December 2021 to June 2022) Net weekly pay: £567.87 (reduced to £507.54 for six months from December 2021 until June 2022) Dates of employment: 29 October 2018 to 20 May 2022 Date of birth: 4 August 1972 Age at time of dismissal: 49 years Contractual notice period: 1 month UNFAIR DISMISSALa. A. BASIC AWARD 1.5 weeks’ pay x 3 years’ service (capped at £571)= £2,569.50 TOTAL BASIC AWARD: £2,569.50b. B. COMPENSATORY AWARD Immediate Loss (loss of pay (salary -net, employer pension contributions calculated on gross salary) from dismissal to date of remedy judgment) £507.54 per week from 21/5/2022 to 30/5/2022 (1 week 4 days) plus employer pension contributions = £870.07 + £31.74= £901.81£567.87 per week from 1/6/2022 to 27/6/2024 (108 weeks and 1 day) plus employer pension contributions =£61,411.08 + £2495.60- = £63,906.68 =£64,808.49 Less net sums earned between 21/5/2022 and remedy hearing: £53,802.56 Less employer pension contributions paid 1/6/2022 to 27/6/2024: £1916.45 Less the sum overpaid by Respondent for 3.2 days holiday pay: £430.77 Less salary paid by Respondent for 21 May 2022 to 31 May 2022: £591.35 =£56,741.13 Immediate Loss = £8067.36 Future Loss of earnings (loss of wages (net) from date of remedy judgment for 52 weeks x £567.87) plus employer pension contributions: =£29,529.24 plus £1120 =£30,649.24 Less estimated future earnings (52 weeks x £543.78) plus employer pension contributions: £28,276.56 plus £1874.99 =£30,151.55 Future Loss = £497.69 *The sum awarded for loss of employer pension contributions is awarded gross and so is subject to any income tax and national insurance due on that sum which is to be deducted by the Respondent Loss of statutory rights = £500 Adjustments Breach of ACAS code -25% increase (on compensation of £9065.05): = £2,266.26 Polkey reduction: 0% Reduction for Contributory Fault- 0% TOTAL COMPENSATORY AWARD = £ 11,331.31 Failure to provide full written particulars of employment (2 weeks gross pay capped at £571 per week): = £1,142 Wrongful Dismissal 7 days’ notice entitlement at reduced rate (7 x £101.51 (52 x £507.54 ÷ 260)): =£710.57 14 days’ notice entitlement at normal rate (14 x £113.57 (52 x £567.87 ÷ 260)): = £1,589.98 Total Wrongful Dismissal damages = £2,300.55 As the Claimant has been awarded compensation for the same period for Unfair Dismissal, no separate award is made for Wrongful Dismissal as this would result in double recovery. TOTAL COMPENSATION TO BE PAID BY THE RESPONDENT = £15,042.81 JUDGMENT on COSTS The Claimant’s application for costs under rules 74(2)(a) and 74(2)(b) of The Employment Tribunal Procedure Rules 2024 succeeds. The Respondent is ordered to pay the Claimant’s legal costs in the sum of £14,087.50 (exclusive of vat).
The Relevant Law
[1]In a claim form (ET1) presented on 17 August 2022, the Claimant brought complaints of unfair dismissal, breach of contract (failure to pay notice pay) and failure to pay holiday pay.[2]Following a one-day hearing on 29 March 2023, the complaints of unfair dismissal and breach of contract succeeded against the Respondent. It was also found that her written statement of particulars of employment did not fully comply with the statutory requirements. The complaint relating to holiday pay was dismissed.[3]A remedy hearing was listed for 27 October 2023. Following there being discussions between the parties and with the Tribunal, I was informed that the parties had reached a settlement. The hearing was therefore adjourned to allow the settlement to be implemented. The adjournment was on the basis that if neither party had made an application to the Tribunal to re-list the matter for hearing by 1 December 2023 at 4pm, then the case was to stand withdrawn by the Claimant as at that date. Judgment was issued in those terms.[4]The parties were not able to reach a binding settlement and so, on the 30 November 2023, the Claimant requested that the stay on proceedings be lifted and that an expedited remedy hearing be arranged.[5]A further remedy hearing took place on 27 June 2024. The Respondent did not attend that hearing. On 24 June 2024, an email was received from Digital Tax Matters. Digital Tax Matters were not on the record as the Respondent’s representatives. “We act as accountants for the Repsondent [sic], and have been requested by them to write to you to confirm that the company had ceased trading on 30th November 2023 due to insolvency. Whilst placing the firm in Administration was considered, the inability to recover retentions, and debtors in such a situation led to the decision to cease trading, due to pressure from Creditors. Despite creditors chasing, none have to date, taken any action to wind up the company. HMRC was going to serve a petition in November 2023, but that has not materialised. The Claimant as former bookkeeper, would have been aware of the poor state of the company’s financial position, so it may not come as a surprise to her. The company itself does not have funds to pay for its own winding up, without prejudicing creditors. Whilst the Company has an obligation to its former employee to deal with her claim, the matter clearly needs to be dealt with. The Solicitors, Tollers who were acting for the Respondent, no longer act. So as not to waste the Tribunal time, as the company is no longer trading, the remedy of reengaging the Claimant is not relevant. Clearly if entitled, she would receive compensation, but the Company is not in a position to pay any award. On that basis the company is unable to object to any award in the knowledge it is insolvent. On the basis of the above, the company did not wish to object to any decision which may be reached by the Tribunal, and as not to waste time was not seeking to send a representative to the scheduled hearing.”[6]I was satisfied that the Respondent was aware of the hearing and had decided not to attend. I decided that it was in the interests of justice that the hearing proceed in the Respondent’s absence. I awarded the Claimant compensation of £15,042.81.[7]Following Judgment on Remedy being issued on 20 September 2024, on the 18 October 2024 the Claimant made an application to the Tribunal for costs against the Respondent. The Respondent was copied into that correspondence. The application was referred to me for consideration on the 1 July 2025. Having sought clarification from HMCTS as to whether or not the Respondent had previously been directed to comment on the application, and establishing that it had not, I gave further directions on the 7 July 2025. Those directions were sent to the parties on the 9 July 2025.[8]In order to ensure that rule 75(2) of The Employment Tribunal Procedure Rules 2024 (“ETPR”) had been complied with, I directed that if the Respondent wished to reply to the Claimant's costs application, or request an oral hearing, it was to do so within 14 days of the date of the letter. I directed that if there was no response from the Respondent within 14 days then the application for costs would be decided without further recourse to the Respondent on the basis of the written submissions from the Claimant and documentary evidence before the Tribunal.[9]No response has been received from the Respondent either in respect of the substantive costs application or relating to its ability to pay any costs if an order is made. As a comprehensive written costs application has been made by the Claimant (a letter of seven pages with relevant evidence attached) and as the Respondent has failed to respond in any way to my directions, I considered that it was in accordance with the overriding objective of the ETPR to determine the application on the papers rather than directing that an oral hearing be held. Claimant’s application for Costs[10]The Claimant submits that she should be awarded costs on two bases. Firstly, because the Respondent’s conduct has been vexatious, abusive and unreasonable in the manner in which the proceedings had been conducted.[11]Secondly, because the Respondent’s defence of the complaints of unfair dismissal, wrongful dismissal and breach of section 1 of the Employment Rights Act 1996 had no reasonable prospects of success.[12]The Claimant submits that the Respondent’s conduct amounts to vexatious, abusive and unreasonable conduct for the following reasons: 12.1. On 29 December 2022, the Respondent’s representative forwarded a draft bundle to the Claimant’s representative which contained documentation from the Respondent which had not been previously disclosed. This included a document titled “Thomas Swannell’s notes of the meeting”, which appeared to be an attendance note prepared by the Respondent’s Operations Manager of the meeting on 20 May 2022. The meeting notes supported the Respondent’s version of events. 12.2. The Meeting Notes had not been provided to the Claimant at any point prior to the preparation of the bundle. Given that the Respondent was asserting that the Claimant had been suspended (rather than dismissed as alleged by the Claimant) during the meeting on 20 May 2022 and it was commencing a disciplinary process into allegations of misconduct against the Claimant, it was highly irregular that the Meeting Notes did not form part of the disciplinary had they been in existence at that time. 12.3. Consequently, the Claimant disputed the veracity of the meeting notes, requesting that the Respondent send a copy of the documentation in both pdf and word format. The Respondent asserted that it only had a copy of the notes in pdf format, a position which it reiterated during the final hearing on 29 March 2023. 12.4. It was therefore the Claimant’s position that the meeting notes had been prepared during the proceedings and were unreliable. This is supported by the findings in the reserved judgment as follows: “No meta data has been provided to show when the document was created or printed off either in Word or PDF. There is no reference whatsoever to the document in the investigation or disciplinary proceedings. The claimant states that she had never seen the statement until it was disclosed during the course of these proceedings. I would have expected the document to have been disclosed during the course of disciplinary proceedings had it been in existence at that time. For those reasons I do not consider it to be a reliable document nor am I satisfied that it was created on the 20 May 2023” [Paragraph 57]….“Further, I do not consider the statement of Thomas Swannell dated the 20 May 2023 to be a reliable document for reasons that I have provided above. This casts doubt on the reliability of his account of what occurred on that date” [Paragraph 60]. 12.5. Consequently, it is the Claimant’s position that the Respondent retrospectively created the Meeting Notes as a means of falsely altering its position in order to mislead the Tribunal and is an abuse of the Tribunal’s process. 12.6. The Claimant submits that the Respondent failure to engage with the Claimant’s ‘without prejudice save as to costs’ correspondence (“WPSTC”) amounts to vexatious, abusive and unreasonable conduct for the following reasons: 12.6.1. On 24 March 2023, the Claimant made a settlement offer of £15,000 which was communicated to the Respondent WPSTC. The WPSTC correspondence clearly sets out that if the settlement offer was not accepted, or if the Respondent unreasonably failed to engage with the WPSTC correspondence, the Claimant would pursue the Respondent for her legal costs. The Respondent’s representative responded on 27 March 2023 to confirm that the offer was rejected and it was not interested in engaging in settlement discussions. 12.6.2. On 17 October 2023, prior to the first remedy hearing which was listed for 27 October 2023 (the “First Remedy Hearing”), the Claimant made a further settlement offer to the Respondent of £16,500 which was again communicated in WPSTC correspondence. It was reiterated to the Respondent that if the settlement offer was not accepted, or if it unreasonably failed to engage with the WPSTC correspondence, the Claimant would be making an application for costs against the Respondent. The Respondent rejected the offer on 20 October 2023. 12.6.3. The Claimant submits that the Respondent’s approach has been to fail entirely, and unreasonably, to engage with the Claimant’s reasoned WPSTC correspondence and offers of settlement. Instead the Respondent continued with the litigation despite the risks which were highlighted to it, putting the Claimant to significant cost and distress in the process. 12.7. The Claimant submits that it is also key that the Claimant was awarded compensation of £15,042.81 by the Tribunal, which is an amount in excess of the Claimant’s settlement offer of 24 March 2023. The Claimant submits that it was unreasonable for the Respondent to have rejected the Claimant’s settlement offers. Further, had the settlement offer of 24 March 2023 been accepted by the Respondent, it would have avoided a further 18 months of litigation. 12.8. The Claimant states that she attempted to confirm a binding settlement through ACAS but was unable to do so because, after settlement between the parties had been agreed at the first remedy hearing, the following occurred: 12.8.1. ACAS were unable to contact the Respondent to confirm binding settlement, despite repeated attempts. 12.8.2. The Respondent dis-instructed their solicitors. 12.8.3. The Respondent’s website was shut down. 12.8.4. The contact details for the Respondent’s contact (Anna Swannell – Managing Director), no longer appeared to be active, with all emails bouncing back. 12.8.5. The Respondent was no longer based at the address contained on the Form ET3. 12.8.6. The directors of the Respondent appeared to be working under a new company, Main Scaffolding Services Limited, which was incorporated on 1 September 2023. 12.9. The Claimant submits that, in light of the above, it appeared that the Respondent was seeking to dissolve the company in order to avoid paying the agreed settlement sum, or any compensation at all, to the Claimant. The Claimant raised her concerns with the Tribunal and requested an expedited remedy hearing. 12.10. The Claimant states that she considered that the Respondent’s email was further evidence that it was seeking to dissolve the company in order to avoid paying any compensation to the Claimant, particularly when taking into account with the following: 12.10.1. No evidence has been provided of the Respondent’s alleged insolvency or any winding up action against it. 12.10.2. The Respondent had not mentioned at any point prior to, or during, the First Remedy Hearing that it was having financial difficulties or that it considered it would not be in a position to pay any compensation to the Claimant whether by way of settlement or at all. 12.10.3. The Respondent had been represented during the First Remedy Hearing by both a firm of solicitors and a barrister. 12.10.4. The Respondent’s Managing Director, Anna Swannell, was also a director of a similarly named company “Main Group Scaffolding Services” which was incorporated in September 2023 and which was active at the time that the Respondent is alleged to have gone insolvent. 12.11. The Claimant submits that the Respondent’s accounts from 31 December 2022 indicate that it had assets of over £800,000 at that time. She submits that whilst the accounts were filed in 2022, there has been no explanation or evidence provided to date as to the whereabouts of these assets or the current financial position of the Respondent. 12.12. The Claimant therefore submits that the Respondent has manufactured its insolvency in order to avoid paying compensation to the Claimant and that it knowingly agreed settlement terms which it had no intention of complying with. For that reason, the Claimant asserts that the settlement discussions between the parties from the first remedy hearing are not protected by without prejudice privilege, as:(1) it was not a genuine attempt to settle the dispute by the Respondent; and(2) there was a fraudulent misrepresentation by the Respondent as to its ability to pay the agreed settlement. The Claimant therefore seeks to rely on the Respondent’s conduct in relation to the agreed settlement in support of this application. A copy of the agreement reached at the first remedy hearing, signed by counsel to both parties, was provided by the Claimant to the Tribunal. 12.13. The Claimant submits that the above incidents show that the Respondent’s conduct throughout the proceedings has been vexatious, abusive and unreasonable and appears to have been undertaken with the purpose of prolonging matters without any intention of paying any compensation to the Claimant. The Respondent has failed to pay the compensation to the Claimant as ordered by the Tribunal.[13]The Claimant submits that the Respondent’s response had no reasonable prospects of success for the following reasons: 13.1. There were numerous inconsistencies in the Respondent’s account of the meeting of 20 May 2022, particularly whether or not the Claimant had been suspended and these were highlighted to the Respondent in the Claimant’s WPSTC correspondence of 24 March 2023. 13.2. These inconsistencies were highlighted in the reserved judgment on liability as follows: “Further the account given by Thomas Swannell at the meeting makes no reference to the claimant being suspended during that meeting. At paragraph 4 of his witness statement it says “I suggested we left the conversation there to allow her some time to calm down over the weekend”. His statement at 350-351 says similar. Again there is no reference to the claimant being suspended. Anna Swannell says in her witness statement at paragraph 14 that Thomas Swannell became very uncomfortable, asked the claimant to leave the premises and told her that the matter would be dealt with on the Managing Director’s return. It is therefore very surprising that the claimant was later sent a letter on the 1 June 2022 [74] which states that she was “verbally suspended from [her] employment pending investigation into the rude and objectionable behaviour and language that you exhibited during the conversation.” This contradiction in the evidence casts further doubt over the reliability of what is said by the respondent’s witnesses as to what occurred on the 20 May 2023” [paragraph 61 of the Judgment] [….] “The inconsistency in the respondent’s case regarding as to whether or not the claimant was suspended on 20 May 2023 is significant and undermines the reliability of the respondent’s assertions” [paragraph 122 of the Judgment]. 13.3. It was the Claimant’s position that the disciplinary process which was conducted against her following the meeting on 20 May 2022, was concocted in response to her allegation that she had been unfairly dismissed during the meeting and in order to, retrospectively, alter events so that was fairly dismissed. This was again highlighted to the Respondent in the WPSTC correspondence of 24 March 2023. This is supported by the judgment on liability which states “I find that the subsequent investigation and disciplinary proceedings were contrived in order to seek to show that a fair procedure had been followed” [paragraph 122 of the Judgment]. 13.4. The Claimant highlighted the issues with the Respondent’s reliance on the Meeting Notes. 13.5. The Claimant’s correspondence to the Respondent sets out fully the deficiencies in the Respondent’s defence to the claim, which, the Claimant asserts were similar to the conclusions reached by the Tribunal. The Claimant submits that it was evident that the Respondent must at least have known, or reasonably ought to have known, that its defence was unmeritorious.[14]In addition to what was said in the original costs application, the Claimant made further submissions in an email dated 7 May 2025 in reliance of the case of 1) Gold Panda Ltd 2) Pandeli Ltd v Ms H O’Keefe [2025] EAT 47. In reliance upon that case, the Claimant submits that the Respondent’s conduct in seeking to dissolve the company in order to avoid paying the Employment Tribunal award to the Claimant amounts to unreasonable conduct.[15]The Claimant seeks costs of £14,687.50 (exclusive of vat) for legal work undertaken by her solicitors and counsel which covers the period 24 March 2023 to 18 October 2024. Procedure Rules[16]The relevant parts of the ETPR are as follows: “When a costs order or a preparation time order may or must be made 74.—(1) The Tribunal may make a costs order or a preparation time order (as appropriate) on its own initiative or on the application of a party or, in respect of a costs order under rule 73(1)(b), a witness who has attended or has been ordered to attend to give oral evidence at a hearing. (2) The Tribunal must consider making a costs order or a preparation time order 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 of it, or the way that the proceedings, or part of it, have been conducted, (b)any claim, response or reply had no reasonable prospect of success, or (c)a hearing has been postponed or adjourned on the application of a party made less than 7 days before the date on which that hearing begins. (3) The Tribunal may also make a costs order or a preparation time order (as appropriate) on the application of a party where a party has been in breach of any order, rule or practice direction or where a hearing has been postponed or adjourned. Procedure 75.—(1) 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. (2) The Tribunal must not make a costs order or a preparation time order against a party unless that party has had a reasonable opportunity to make representations (in writing or at a hearing, as the Tribunal may order). The amount of a costs order 76.—(1) A costs order may order the paying party to pay— (a)the receiving party a specified amount, not exceeding £20,000, in respect of the costs of the receiving party; (b)the receiving party the whole or a specified part of the costs of the receiving party, with the amount to be paid being determined— (i)in England and Wales, by way of detailed assessment carried out either by a county court in accordance with the Civil Procedure Rules 1998(33), or by the Tribunal applying the same principles; […] (3) A costs order under sub-paragraphs (b) to (d) of paragraph (1) may exceed £20,000. Ability to pay 82. In deciding whether to make a costs order, preparation time order, or wasted costs order, and if so the amount of any such order, the Tribunal may have regard to the paying party’s (or, where a wasted costs order is made, the representative’s) ability to pay.”
Relevant Law
[17]Costs orders in the Employment Tribunals are the exception rather than the rule [Yerrakalva v Barnsley Metropolitan Borough Council and anor 2012 ICR 420, CA]. Costs are not routinely awarded to the losing party.[18]The purpose of an award of costs is to compensate the party in whose favour any order is made, rather than to punish the paying party.[19]Whether a party’s conduct in bringing, defending or conducting a case, is unreasonable is a matter of fact.[20]The burden of proving that the costs jurisdiction is engaged (that is whether one or more of the rule 74 grounds is engaged) falls upon the party seeking the order. The Tribunal’s power to award costs is discretionary. This means that even if one or more of the grounds at 74(2) and 74(3) ETPR are made out, the Tribunal is required to consider whether it is appropriate to exercise its discretion to make an order for costs having regard to all of the relevant factors.[21]In determining whether there is unreasonable conduct the Tribunal is required to take into account the “nature, gravity and effect” of the party’s conduct. In assessing these factors, the Tribunal is required to look at the totality of the circumstances.[22]Costs should not automatically be awarded because a party has given false evidence knowingly (Kapoor v Governing Body of Barnhill Community High School EAT 0352/13).[23]In the case of Gold Panda Ltd and anor v O’Keefe 2025 EAT 47, one of the respondents applied for voluntary removal from the Register of Companies during the course of Tribunal proceedings. The other respondent had failed to object to a potential compulsory strike off from the register despite knowing that it was a respondent to the proceedings, failed to notify the claimant of the imminent strike off and failed to notify the claimant and the Tribunal of its imminent dissolution until after completion of evidence and submissions in the proceedings. The EAT upheld the Tribunal’s Judgment that these actions amounted to unreasonable conduct of the proceedings on the part of the respondents. This was because it was conduct intended to influence the course or outcome of the Tribunal claim by making it impossible for the claimant to secure a judgment on the merits of her complaints. The EAT observed that it was legitimate for the Tribunal to examine the likely effect of the behaviour and the subjective intention behind it. Conduct by a respondent intended to influence the course or outcome of proceedings by making continuance of them impossible for a claimant could amount to unreasonable conduct.[24]At paragraph 21 to 24 of his Judgment, Lord Fairley said, “21. In examining whether unreasonable conduct amounted to “the way that the proceedings (or part) have been conducted”, the tribunal first required to define the unreasonable conduct. It did so, and no criticism is made of its conclusions on that issue.22. The next step, therefore, was to consider whether the unreasonable conduct was part of the conduct of the proceedings. In considering that issue it was legitimate for the tribunal to examine, as part of the whole circumstances, the likely effect of the conduct and the subjective intention behind it. A tribunal’s assessment of intent will invariably depend upon the inferences it is prepared to draw about the state of mind of the party whose conduct is under consideration.23. Without attempting an exhaustive definition of the circumstances in which acts or omissions by a respondent might amount to the conduct of tribunal proceedings, therefore, conduct by a respondent intended to influence the course or outcome of such proceedings by making continuance of them impossible for a claimant certainly could. 24. I do not accept the submission for the appellant that the tribunal’s conclusions were limited to the issue of the enforceability of any financial award. On a fair reading of the tribunal's reasons, in particular at ET § 31, it concluded that the purpose of the conduct was to prevent all of the claimant’s complaints against the appellants from proceeding any further. The purpose of the conduct went beyond the issue of enforceability of a financial award. The intention of the appellants was to bring the proceedings to an end by frustrating the claimant’s ability to establish liability on the merits of her complaints. The tribunal properly concluded that such conduct was not extraneous to the proceedings.”[25]The principles which apply to offers to settle that are not beaten (Calderbank offers) do not apply in the Employment Tribunal. However, the rejection of an offer of settlement is potentially a factor relevant to the Tribunal’s exercise of discretion (Kopel v Safeway Stores [2003] IRLR 753).[26]It is not necessary to establish a direct causal link between particular examples of unreasonable conduct and the costs incurred. Once a finding of unreasonable conduct is made, the question of costs is then very much within the discretion of the Tribunal (D’Silva v NATFHE (now known as University and College Union) and ors EAT 0126/09).[27]Funding arrangements such as legal expenses insurance are not relevant to the Tribunal’s discretion to award costs [Mardner v Gardner and ors EAT 0483/13].[28]The protection of the ‘without prejudice’ rule may be removed in cases where the rule would otherwise serve as a cloak for ‘unambiguous impropriety’. A high threshold of seriousness must be reached before the abuse will warrant withholding ‘without prejudice’ protection. My Conclusions Have grounds for a Costs Order been made out?[29]The Claimant seeks to rely upon a document relating to settlement signed by counsel to both parties at the first remedy hearing on the 27 October 2023. I consider that the without prejudice doctrine applies to this document. I am not satisfied that the Claimant has demonstrated that the high threshold is met for waiving privilege in respect of that document. Consequently, I have had no regard to what is said in the document concerned when reaching my conclusions. I am however aware that negotiations between the parties were taking place at that hearing and that a settlement had been reached, as is clear from my consequent Judgment following the first remedy hearing.[30]I am not able to award costs unless one or more of the criteria at rule 74 are engaged. I must first consider whether any of the relevant criteria are met. The Claimant asserts that rules 74(2)(a) and rule 74(2)(b) are engaged.[31]Dealing first with rule 74(2)(a), I have to consider if the Respondent’s conduct during the course of the proceedings has been unreasonable. I find that it has. This is for the following reasons.[32]Firstly, I find that the Respondent’s conduct as it relates to the Register of Companies amounts to unreasonable conduct of the proceedings and engages rule 74(2)(a). I find that it is likely that its conduct has been designed to frustrate the proceedings and the outcome of proceedings.[33]The following information regarding the Respondent can be gleaned from Companies House website: https://find-and-update.company-information.service.gov.uk/company/09930652 33.1. The company status is active, with an active proposal to strike off. The nature of business is recorded as “43991 – Scaffold erection”. The Respondent was previously called Main Scaffolding Services Limited from 29 December 2015 to 12 April 2018. The registered office address is 7 Duncan Close, Moulton Park Industrial Estate, Northampton, England, NN3 6WL. 33.2. Anna Maria Swannell was appointed a director on 7 November 2016. That appointment is continuing. 33.3. Accounts for year ended 31 December 2022 were filed on 27 April 2023. 33.4. By virtue of a termination of appointment filed on the 19 September 2023, Jacob Farrell Swannell ceased to be a director as of 31 August 2023. 33.5. A confirmation statement was due by 4 November 2023. 33.6. On the 9 January 2024, there was a notice for compulsory strike off. On 6 February 2024 compulsory strike of action was suspended. This was because an objection was filed with the Registrar. 33.7. The accounts for the year ended 31 December 2023 were due by 30 September 2024.[34]Jacob Farrell Swannell was appointed as a director of another company, Main Scaffolding Services Ltd, on 1 September 2023 and that appointment is continuing. Anna Maria Swannell was also appointed a director of Main Scaffolding Services Ltd, on 1 September 2023 and resigned on 31 August 2024. Main Scaffolding Services Ltd was incorporated on 1 September 2023. The nature of its business is “43991 – Scaffold erection”. Upon incorporation, its registered address was 7 Duncan Close Moulton Park Industrial Estate Northampton NN3 6WL England, which is the same address as the Respondent. On 31 October 2023 its registered office address was changed to 27 St. Cuthberts Street Bedford MK40 3JG. (https://find-and-update.companyinformation.service.gov.uk/company/15109105).[35]No corroborative evidence has been provided to support what is said in the email of 24 June 2024 from Digital Tax Matters. I find that the email in isolation is insufficient to demonstrate that the company was or is insolvent, or that HMRC intended to serve a petition in November 2023. Whilst there has been a notice for compulsory strike off, that appears to be as a consequence of the Respondent's failure to serve a confirmation statement. It does not demonstrate that the company is insolvent.[36]The Respondent was represented by counsel at the first remedy hearing on 27 October 2023. There was no mention whatsoever at that hearing of impending insolvency or that a decision to cease trading was imminent. Indeed, that hearing was adjourned on the basis that settlement had been reached.[37]Directly before and after the first remedy hearing there was a flurry of activity both in relation to the Respondent and Main Scaffolding Services Ltd. Main Scaffolding Services Ltd was incorporated on 1 September 2023. Jacob Farrell Swannell was appointed a director on the same date. On 19 September 2023 notice was filed which resulted in him ceasing to be a director of the Respondent. Anna Maria Swannell was also appointed a director of Main Scaffolding Services Ltd, on 1 September 2023. On 31 October 2023, the registered office of Main Scaffolding Services Ltd was changed so it is no longer the same registered office address as the Respondent.[38]It is notable that both the Respondent and Main Scaffolding Services Ltd are scaffolding businesses with the same directors as the Respondent (albeit Anna Maria Swannell subsequently resigned as a director) and that they were both had the same registered office address until 31 October 2023.[39]The Respondent has failed to provide any explanation whatsoever for its failure to file a confirmation statement with Companies House as required or its failure to any steps to prevent compulsory strike off action.[40]Whilst there had already been judgment on liability at the time that the above conduct occurred, the Tribunal had not by that point determined remedy.[41]Had the Claimant not filed an objection to the compulsory strike off notice then the Respondent company would have been dissolved thus preventing these proceedings from concluding. Taking into account all of the above, on the balance of probabilities, I find that the conduct by the Respondent in omitting to file a confirmation statement and the subsequent failure to take any steps to prevent compulsory strike off action was intended to influence the course and outcome of these proceedings. It amounted to unreasonable conduct of the proceedings and was designed to frustrate the outcome of proceedings by bringing them to a premature end before remedy had been dealt with.[42]Secondly, I find that the Respondent’s conduct relating to the settlement negotiations at the first remedy hearing to be unreasonable conduct of the proceedings and so also engages rule 74(2)(a).[43]Given what has transpired in terms of the events I have identified at paragraphs 37 and 38 above, I have formed the view that it was unlikely the Respondent ever had any real intention of reaching a binding settlement at the first remedy hearing. I have formed the view that this was solely a delaying tactic. Had the Respondent not indicated that it intended to settle then judgment on remedy would have been given at that first remedy hearing, some 8 months earlier than eventually was the case. This resulted in additional costs being incurred by the Claimant unnecessarily, as well as wasting the Tribunal’s time and resources, and causing significant delay.[44]In respect of the Claimant’s submissions relating to the document entitled “Thomas Swannell’s notes of the meeting”, I find that threshold of unreasonable conduct has not been met. Whilst I found that the document was unreliable, that was a finding that I made on the balance of probabilities weighing the evidence before me. That is not enough to meet the threshold of unreasonable conduct without more. Rule 74(2)(a) is therefore not engaged on that basis.[45]I find that the Respondent’s response to the complaints of unfair dismissal and wrongful dismissal had no reasonable prospects of success. There were very significant contradictions in the Respondent’s evidence relating to what actually occurred at the meeting on the 20 May 2023 and as to whether or not the Claimant was suspended. I found that the subsequent investigation and disciplinary proceedings were contrived in order to seek to show that a fair procedure had been followed. This was something that the Respondent would have been aware of from the commencement of proceedings. This is therefore a case in which the Respondent, who was legally represented, must have known, or should have known, that its response was unmeritorious, given the central importance of what occurred at the meeting on the 20 May 2023, and any subsequent disciplinary proceedings, to prospects of success. Rule 74(2)(b) is therefore engaged on that basis. Should the Tribunal exercise its discretion to make a Costs Order?[46]As I have found that rules 74(2)(a) and 74(2)(b) are engaged, I must go on to consider whether the Tribunal should exercise it discretion to make a Costs Order.[47]I have decided that the Tribunal should exercise its discretion to make a Costs Order in this case. In reaching that conclusion I have taken into account the following factors. I have borne in mind that costs orders are the exception rather than the rule and that they should be compensatory not punitive. I have considered all of those factors that I refer to above in relation to whether or not the criteria in rules 74(2)(a) and 74(2)(b) are met. I have taken into account that the Respondent was legally represented for much of the proceedings. I have taken into account that the Respondent’s behaviour in these proceedings has undoubtedly significantly increased the costs incurred by the Claimant. This is despite its response being unmeritorious in respect of the unfair dismissal and wrongful dismissal complaints.[48]I have also taken into account that the Claimant made two offers of settlement. The compensation awarded by the Tribunal exceeded the first offer that was made by the Claimant prior to the liability hearing. The Claimant fully laid out why it considered the Respondent’s conduct was unreasonable and there were no reasonable prospects of success in its WPSTC letters of 24 March 2024 and explicitly stated that costs would be sought on that basis if the claim succeeded. This was summarily rejected by the Respondent in an email which stated “My client is not willing to enter into negotiations to settle this case and does not accept the Claimant’s offer of £15,000 in settlement prior to the hearing”. There was no attempt to engage with the issues raised by the Claimant in her detailed letter, which runs to three pages.[49]The second offer was made on the 17 October 2023 just prior to the first remedy hearing. The offer to settle exceeded the award finally achieved by a small proportion. Again, the offer was summarily rejected by the Respondent as follows “We have taken our client’s instructions and your client’s offer of settlement is rejected for the reasons as previously set out.” No reasons were set out ‘previously’, despite what is said in the email.[50]I find that the Respondent’s conduct was unreasonable in failing to engage with the Claimant’s WPSTC and offers of settlement, which were fully reasoned and highlighted the weaknesses in the Respondent’s case. This is especially so also taking into account the Respondent’s conduct in agreeing to settle at the first remedy hearing and then failing to continue to engage with the Claimant to reach a binding settlement,[51]I have not been able to take into account the Respondent’s means when considering whether the Tribunal should exercise its discretion as the Respondent has not made any submissions in relation to the costs application. It has not asked that I take into account its means when deciding that application. I have considered whether I should make further enquiries as to the Respondent’s means prior to exercising my discretion. I decided that it was not in accordance with the overriding objective to do so given that the Respondent, who has been legally represented previously, has been given an opportunity to make submissions and request an oral hearing if it wished. Further, there has already been significant delay in this case and I consider that further delay was undesirable and not in the interests of justice. What amount of Costs should be awarded?[52]The Claimant has been legally represented from the commencement of these proceedings. However, reasonably, she only seeks costs from the date that the first WPSTC letter was sent to the Respondent some seven months later. The Claimant has provided a detailed schedule of the costs incurred from 24 March 2023 to 18 October 2024. I have carefully considered the breakdown of those costs and whether those costs are reasonably incurred. I note that the Claimant appears to have the benefit of legal expenses insurance. However, that does not preclude her from recovering costs if the requirements of the ETPR are met.[53]The hourly rates charged by the Claimant’s solicitors are within the specified hourly rates for the region concerned and counsel’s fees are not excessive. The overall costs sought are significant given that the liability hearing only lasted for one day and as they amount to almost as much as the compensation that has been awarded. I have therefore considered whether the costs sought are proportionate in the circumstances. I have decided that they are proportionate given that the costs incurred will undoubtedly have been increased significantly by the Respondent’s unreasonable conduct in these proceedings, causing the need for additional work and a second remedy hearing.[54]The Claimant’s holiday pay complaint did not succeed. However, it formed a minor part of the claim overall, the main focus at the liability hearing (and in the documentary evidence relied upon) being on the unfair dismissal and wrongful dismissal complaints. It is not possible to identify what proportion of the Claimant’s legal costs were incurred as a consequence of pursuing the holiday pay complaint. However, in the interests of fairness to the Respondent, I consider that there should be a reduction of £600 in the Claimant’s overall costs to take into account the time likely to have been spent dealing with that aspect of the Claimant’s case. This amounts to five chargeable hours at the principal fee-earner’s hourly rate.[55]The Claimant is therefore awarded costs in the sum of £14,087.50 (exclusive of VAT). Approved by