Mr Mallakin v Designer M&E Services UK Ltd and others: 3312302/2020
EMPLOYMENT TRIBUNALS
Case No 3312302/2020
Between
Mr MallakinClaimantDesigner M&E Services UK Ltd and othersRespondent
Before
Employment Judge CowenIn person for claimantMr Hobbs (instructed by counsel) for respondentDate 17 November 2022
JUDGMENT
[1]The claimant’s claims for race discrimination and victimisation are dismissed upon withdrawal.[2]The Second and Third respondents are removed from the remaining proceedings.[3]The claimant’s application to amend the particulars of claim to include allegations 9-12 is permitted.[4]The respondent’s application for costs is dismissed.
REASONS
[5]The claim arises from the claimant’s employment with the first respondent 2020 (and now the only remaining respondent and therefore referred to as the respondent throughout), between 4 September 2017 and 17 August as a Mechanical Design Engineer.[6]The claimant issued a claim on 8 October 2020 claiming direct race discrimination, victimisation and unfair dismissal.[7]By an application dated 7 December 2020 the respondent applied to strike out the claimant’s claims, or to place a deposit order on the claimant’s claims.[8]On 20 October 2021 the claimant applied to amend his particulars of claim. This was opposed by the respondent.[9]The claimant subsequently served a race discrimination questionnaire on the respondent, who responded to it and provided some policy documents. As a result of this, the claimant withdrew the race and victimisation claims which have been dismissed upon withdrawal.[10]At a preliminary hearing on 21 June 2021, Employment Judge Quill listed the case for a hearing to consider:-a. Any amendment requestsb. Clarify the issuesc. Deal with any application to strike outd. Deal with any application for a deposite. Deal with any other case management issues.[11]The hearing before the Tribunal today was to deal with all those points. The respondent withdrew the application for strike out during the hearing and therefore this is not addressed. The deposit order application is dealt with in a separate order as is the case management. Below is a reserved judgment in respect of the remaining amendment application by the claimant and costs application by the respondent.
THE LAW
[12]Amendment application The Tribunal must take into account the test set out in Selkent Bus Co Ltd v Moore 1996 ICR 836, EAT and must consider the following;a. nature of the amendment — The tribunal has to decide whether the amendment sought is one of the minor matters or a substantial alteration pleading a new cause of actionb. applicability of time limits — the tribunal must consider whether the proposed claim/cause of action is out of time and, if so, whether the time limit should be extendedc. timing and manner of the application — although amendments may be made at any stage of the proceedings, a delay in making the application is a discretionary factor which ought to be considered. It is relevant to consider why the application was not made earlier and why it is now being made: for example, the identification of new facts or new information from documents disclosed on discovery. Costs[13]Rule 75.— Costs orders and preparation time orders “(1) A costs order is an order that a party (“the paying party”) make a payment to— (a) another party (“the receiving party”) in respect of the costs that the receiving party has incurred while legally represented or while represented by a lay representative;”[14]Rule 76.— When a costs order or a preparation time order may or shall be made (1) A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that— (a) a party (or that party's representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted;[15]The Tribunal must consider whether a party’s conduct falls within rule 76(1)(a). If so, it must also ask itself whether it is appropriate to exercise its discretion in favour of awarding costs against that party. See Beat v Devon County Council and anor EAT 0534/05 where the EAT held that an employment tribunal had erred in jumping from its finding that the bringing of proceedings had been unreasonable and misconceived to awarding costs of £10,000 against the claimant, without going through the process of exercising its discretion as to whether that order was appropriate. It was said that the ET should have balanced the amount of costs incurred by the unreasonableness of the conduct or the misconceived part of the claim against the other parts of the claim, and considering whether there was a need for the respondent to be compensated in costs.[16]When considering whether the behaviour of the party was ‘unreasonable’ the Tribunal should consider the ‘nature, gravity and effect’ of a party’s conduct; see McPherson v BNP Paribas (London Branch) 2004 ICR 1398, CA[17]Amendment applications Having heard from the claimant with regard to his application to amend, the respondent acknowledged that they did not contest the addition of allegations 9-12 as proposed by the claimant, to the extent that they amount to further information in relation to the previously pleaded allegations 1-8. In relation to each of the proposed amendments, I considered the following:-[18]Allegation 9 – the claimant submitted that he was not aware at the time he issued his claim that the respondent had provided him with false information. It had come to his attention that those who were employed as temporary Revit Coordinators, were still in post at March 2021.[19]The respondent said that this amounted to further information in relation to allegation 3. It did not amount to a separate claim and hence was not opposed on the basis that it was a footnote.[20]I consider that as the claimant’s original claim included the fact that the claimant was not offered the role of Revit Coordinator this does not amount to an additional claim, but further and better particulars of his existing claim. The additional information about those who carried out the role was not available at the time the ET1 was issued.[21]The amendment does not place the respondent at any prejudice and therefore the amendment is allowed. It comes within issue 3.3 and 3.9 of the list of issues.[22]Allegation 10 -this too involved the claimant adding further evidence to an existing claim. He asserts that the respondents have recruited during the period of the redundancy and after – indicating that the redundancy was not genuine and that other positions were available for which the claimant could have applied.[23]The respondent acknowledged that this amounted to an additional note to allegation 1 and therefore did not object.[24]I consider that this amendment does not place the respondent at any prejudice and the evidence could otherwise be contained in disclosure and witness statements and therefore the amendment is allowed. This lies within issues 3.5,3.8 and 3.11 of the list of issues.[25]Allegation 11- The claimant asserts that the respondent did not follow ACAS guidance on how to avoid redundancies. His assertion is that the respondent ought to have considered bumping, so that the claimant could replace others. He also asserts that to avoid redundancy he could have remained on furlough.[26]The respondent opposes this amendment saying that it lacks specification as to which part of the ACAS guidance has been breached.[27]I consider that the amendment refers to the respondent’s failure to offer suitable alternative employment, to consider bumping, or to continue furlough. All of these assertions are clear from the proposed amendment.[28]The respondent is not placed at any significant prejudice by the addition of these points. They are clearly outlined in the proposed amendment. The claimant already claims both that the redundancy was not genuine and that there was a lack of consideration of suitable alternative employment and therefore this amendment is an extension of that claim. Whilst it could have been included more clearly in the initial ET1 or further and better particulars, there is no prejudice to the parties, who still have time to prepare for the final hearing to include these points. The amendment is allowed. This is within 3.2 and 3.3 of the list of issues.[29]Allegation 12 – This is a discrete point on the number of redundancies made within a 90 day period. The claimant says that the respondent, in their reply to a discrimination questionnaire indicated that it was more than 20 people. This was new information to him and gives rise to an issue about whether a collective consultation should have taken place.[30]The respondent opposes this application, saying that the claimant knew of the number of redundancies and this ought to have been included in an earlier pleading.[31]The claimant asserts that he did not know of the number of redundancies at the respondent at the time of his own redundancy. He raised the issue at his own grievance to which he was given a reassurance that they hoped it would not be beyond the threshold for collective redundancy. It does not therefore seem that the information was available to the claimant at the time.[32]This is a relatively discrete point which is related to the over all fairness of the redundancy procedure and therefore could be considered to be part of the existing claim. The respondent has time to address this both in disclosure and witness statements and will not be placed at prejudice in doing so. As for all these amendments, if they were not to be allowed, then the claimant’s case would not be able to be considered in full and all aspects of the redundancy procedure considered. This amendment is allowed. This also lies within 3.2 of the list of issues. Costs[33]The respondent made an application for costs associated with the withdrawn claims of discrimination and victimisation. The respondent set out a chronology of the litigation, including the fact that the claim was issued on 8 October 2020 and that a questionnaire was sent to the respondent on 3 December 2020. The respondent had made an application for strike out on 7 December 2020. In short the respondent asserted that the claimant’s claim for discrimination and victimisation was inappropriate and misconceived and that it had taken until EJ Quill’s preliminary hearing for the claimant to realise this.[34]The claimant asserted that he had sufficient evidence to pursue his race claims but chose to withdraw them in an attempt to be reasonable. He had sent his discrimination questionnaire as a further attempt to be reasonable. Once he had received those answers and attended before EJ Quill he decided to withdraw his claim.[35]I considered first whether there was conduct on the part of the claimant which was vexatious, abusive, disruptive or otherwise unreasonable. The respondent had submitted that this related only to the withdrawal of the discrimination and victimisation claims. It appeared that the claimant did have legal advice at the time he started his claim and referred to having had advice from a number of counsel.[36]Whilst neither party went into detail about the content of the discrimination claims, it appeared from the face of the ET1 and ET3 that the claimant had asserted that his treatment through the redundancy process as well as a failure to promote had been on grounds of race and that his grievances amounted to protected acts, for which he had suffered victimisation.[37]I was not provided with detailed submissions on the reasons why the respondent asserted that it was unreasonable for the claimant to have brought his claim at all. It was submitted that a questionnaire should have been sent prior to issuing the claim. However, I was not referred to any legal requirement to issue such a questionnaire prior to issue, nor is there an obligation for the respondent to reply to it. Such a request cannot be considered unreasonable when it was of clear assistance to the parties.[38]In considering the nature, gravity and effect of bringing the claim I take into account the fact that at the point where the claimant was asked to provide further and better particulars of his claim, he chose to withdraw it entirely. To suggest that issuing a claim which is within the jurisdiction of the Tribunal could be unreasonable, is to potentially prevent access to justice. The claimant did not pursue the claim beyond the point where it became clear to him that it may not be successful.[39]I remind myself that the bar for the award of costs in the Tribunal is not the same as it is in the County Court. The behaviour of the claimant in making his claim and withdrawing it upon being asked to provide details of it, was not unreasonable. There is therefore no justification for an award of costs on this occasion.
The facts
[40]Mr Baish told me and I accept that the respondent carried out a full review of its projected turnover and overhead costs. A projected decline in revenue of 50 percent was anticipated. An immediate need to reduce overheads was identified.[41]As it happens, the projected decline in revenue was borne out in fact. The respondent’s turnover to 2021 fell to £56 million and it made a £2.7million loss. No new projects were secured until April 2021. Four tenders that the respondent made in May and June 2020 were unsuccessful and, in any event, did not involve any design aspect as far as the respondent was concerned.[42]As well as furloughing many staff, an across-the-board salary reduction of 10 percent was agreed with the workforce to come into effect on 1 June 2020. Notwithstanding this, the respondent decided that redundancies were necessary. Redundancies were selected based on the ‘criticalness’ of work, workload and current business requirements.[43]A decision was made to disband the Design Department. Mr Matt Dyer was able to deal with legacy design issues and the decision was made that in future design work was to be outsourced to outside consultants.[44]It is clear to me and I find that there was a genuine redundancy situation.[45]As the Design Team was to be disbanded, so the claimant and Mr Bobby Fitzsimmons were put at risk of redundancy.[46]In total 22 employees were put at risk of redundancy. Three were at the London office and 14 at the Watford office. 5 were said to be site based but clearly reported to someone. I had little evidence on this issue but have assumed that they reported to Watford. Thus 19 were at Watford and 3 in London.[47]I find that the decision to put them at risk triggered the statutory obligation to consult if relevant.[48]I find that the London and Watford offices were different establishments. The unit the claimant was assigned to was the Design Team and this was based in London. As such, I find that there was no failure to undertake collective consultation as the threshold of 20 at risk employees at one establishment was not reached.[49]The later redundancies in September 2020 do not stand to be aggregated as at that time they were not contemplated and the consultation process on the claimant’s wave of redundancies had begun.[50]In total 17 employees were made redundant in the first wave.[51]I find that the decision to disband the Design Department was a perfectly legitimate business decision taken in good faith. It is not for me to review a genuine management decision to make redundancies. I find that the reasoning to dissolve the Design Team was valid and fair. As such, I find the claimant’s selection for redundancy was fair. As the whole department was to go, so neither a pool nor selection criteria are relevant.[52]On 1 June 2020 Mr Dyer spoke to the claimant who warned him he was at risk of redundancy. Mr Bobby Fitzsimmons was also placed at risk of[53]The claimant complains that Mr Dyer said words to the effect that he had been told to deal with it. This is hardly surprising as he had been told to deal with the claimant’s redundancy. Mr Dyer was his line manager. As is so often the case, there may be a confusion in the claimant’s mind between two different concepts. Obviously, the fact that his job was potentially redundant was predetermined. What was not predetermined, in my judgment, was that his contract of employment would necessarily be terminated.[54]On 2 June 2020 a company bulletin was released informing the workforce of redundancies in eight support service departments including the Design Team.[55]Also, on 2 June 2020 the claimant was written to in order to confirm he had been placed at risk of redundancy and invite him to a consultation meeting.[56]As a matter of fact, Mr Dyer, as Head of the Department, was not put at risk of redundancy. I find that this was fair. Mr Dyer was a manager and multiskilled. His roles were more extensive than the claimant’s and he was to be retained to deal with legacy issues before moving to a new role in management.[57]The first consultation meeting was held on 4 June 2020. At the time the respondent was contemplating the end of the furlough scheme and the fact that the respondent would have to start contributing to the claimant’s salary again. It was not to know that the scheme would be extended. The claimant was informed he could not be kept on furlough any longer. Two alternative positions were offered but it was agreed that they were not suitable for the claimant.[58]At about this time the respondent engaged three agency workers to work as Revit (a software design system) coordinators in the CAD Department. At the time the respondent engaged such consultants for four weeks although, as it turned out, they were engaged for about nine months.[59]The claimant became aware of this and it clearly angered him. He raised the issue with Mr Dyer prior to the second consultation meeting on 12 June 2020. There were no vacancies in the CAD Department for the claimant to fill and the two employees in the department (excluding the Head of Department) were on salaries of £25,000 or so.[60]As agency appointments they were clearly not vacancies that the respondent could have offered to the claimant. Nevertheless, it could be put that the respondent could and should have created a role in the CAD Department of salaried Revit Coordinator for the claimant. I find there was no failure to do this. This is because:60.1 The post needed filling immediately. The claimant accepted he did not have the required skill set and would have needed about four weeks training.60.2 The post was scheduled to be limited in duration and so was unsuitable for a full-time employee.60.3 The claimant is recorded as saying repeatedly in the second consultation on 12 June that he did not want the role.[61]The role would have involved a significant reduction in salary of at least £20,000 and possibly more for the claimant. Whilst he might say in retrospect that he would have taken the job as any money is better than none, I doubt he would have accepted the role. At best, before me, he said he might have done. In any event had he done so he agreed he would have been immediately actively looking for a higher paid role and, as such, any role would have been a “stop gap”.[62]There were two further consultations on 22 June and 16 July 2020. In between the last two consultations the claimant’s grievance was dealt with.[63]It is clear from the consultation meeting notes that a great deal of time was spent by the claimant seeking to negotiate a better financial package for his departure. I do not hold this against him in any way and it is only human nature that in these circumstances someone is going to look to see what they can best achieve.[64]I find that the consultations were a genuine attempt by the respondent to ascertain whether the claimant’s contract of employment could be retained. Unfortunately, there were no viable options available. I find this was not just a tick box exercise. In fact, Mr Bobby Fitzsimmons was moved to a role as an on-site Electrical Engineer as the respondent had need of one. This illustrates to me that the respondent was prepared to consider viable alternatives to redundancy where possible. Bumping[65]Quite apart from suggesting he could have a role in the CAD Department the claimant has produced a list of 21 younger and more junior employees whose jobs he says he could have done. These are on-site Project and Mechanical Engineer roles which varied in salary from a graduate starter at about £25,000pa to £55,000pa.[66]The respondent did not consider bumping as no roles were available and, in any event, any such role would have been unsuitable in their opinion. In my judgment the fact that the respondent did not consider bumping was not outside the range of reasonable responses of a reasonable employer. This is because:-66.1 All the proposed employees would have had existing knowledge of the projects they were working on and had relationships with clients. Any change would have been disruptive.66.2 There were no vacancies.66.3 The jobs were different.66.4 The pay was significantly different.66.5 The claimant was not that much more senior in length of service (obviously he had more experience though)66.6 The claimant would have been looking for alternative higher paid roles immediately and so probably would not have lasted had he taken the role.[67]The claimant was dismissed on 17 July 2020 with one months’ notice, effective 17 August 2020.[68]I find that the reason for the dismissal was redundancy and that is a fair reason.[69]The claimant appealed and the appeal was heard by Mr Baish. The claimant’s points were considered and addressed. Unfortunately, there was no viable alternative to the termination of the claimant’s employment and the appeal was dismissed.[70]Between August and December 2021 seven members of staff were recruited. Two were the roles offered to the claimant. Two were trainee Project Managers and one Mechanical Engineer. These were not design posts, were not suitable for the claimant and did not cover work that the claimant had formerly done. Two were Construction Engineers who replaced the employees who subsequently left.[71]Salaries were restored to pre-lockdown levels in early 2021.
Conclusion
[72]I find that the reason for dismissal was redundancy.[73]I find that the claimant was fairly selected for redundancy.[74]I find the respondent carried out a fair consultation process.[75]I find the respondent did consider alternatives to terminating the claimant’s contract of employment, that there were none and that the decision not to keep him on furlough was reasonable in the circumstances.[76]I find that there was a fair appeal process.[77]I find that the decision to dissolve the Design Department was reasonable.[78]I find that not including Mr Dyer in the at risk of redundancy list was fair and reasonable.[79]I find that the decision to dismiss the claimant was not predetermined.[80]I find there was a genuine redundancy situation[81]I find that the respondent acted fairly in not offering the claimant any role as Revit Coordinator in the CAD Department.[82]I find that the respondent did recruit employees after the claimant was dismissed but not to do any work associated with his former role.[83]For the above reasons the claimant’s claim is dismissed.