Mr Justin CordesClaimantRedranger UK LimitedRespondent
Before
Employment Judge B CampbellMr I Burke (instructed by Solicitor) for respondentDate 22 October 2021
JUDGMENT
[1]The claimant was unfairly dismissed by the respondent contrary to section 94 of the Employment Rights Act 1996;[2]The claimant was not automatically unfairly dismissed contrary to section 103A of the Employment Rights Act 1996;[3]The respondent is ordered to pay the claimant Nine Thousand, Eight Hundred and Twelve Pounds and Sixteen Pence (£9,812.16) as compensation. E.T. Z4 (WR)
REASONS
[1]This claim arose out of the claimant's employment with the respondent as a Business Development Manager for UK and Europe. The respondent manufactures and distributes aftermarket car parts. It is part of a worldwide group, based in Australia. The group also has bases in the United States and Vietnam.[2]In the earlier stages of the claim the respondent challenged whether the claimant had completed sufficient continuous service to be able to make an 'ordinary' claim of unfair dismissal under section 94 of the Employment Rights Act 1996 ('ERA'). He had taken up the role from which he was dismissed on 10 July 2018 and his dismissal took effect on 10 September 2019. Following a case management preliminary hearing it was established that the claimant had worked for another company in the same group as the respondent immediately before, which qualified as an 'associated employer' under section 231 ERA. This resulted in the claimant's continuous service period being treated as beginning in August 2014 and therefore it was accepted by the respondent that he had completed five qualifying years of service at the point of dismissal.[3]Evidence was heard from the claimant and, on behalf of the respondent, Mr Edward Winfield and Mr Graeme Jeram. Both the claimant and Mr Winfield are based in Australia now and the hearing times were adjusted where necessary to take account of the fact that they were giving their evidence in the evenings at their local time.[4]Although there was a degree of dispute between a small number of details of the evidence of the witnesses, principally between the claimant and Mr Jeram in relation to a conversation described below, the witnesses were all found generally to be credible and reliable.[5]The parties helpfully prepared a joint bundle of documents. Page references below are references to those pages in the bundle.[6]It had been agreed at a previous preliminary hearing that evidence in chief would be led by way of witness statements, and those were provided in advance. The parties also provided written notes of their closing submissions after the evidence had been heard. These were also taken into account in deciding the claim. Issues The issues to be determined in the claim were as follows:
Issues
[7]Did the respondent automatically unfairly dismiss the claimant contrary to section 103A ERA, in that the sole or principal reason for dismissal was that he had made one or more protected disclosures under section 43A ERA?;[8]Separately did the respondent unfairly dismiss the claimant more generally under section 94 ERA?;[9]If the answer to either 1 or 2 is yes, what compensation should be ordered? Findings in fact[10]The following findings in fact were made as they are relevant to the issues.[11]The claimant has a background and experience in sales. He worked within the respondent's group in Australia and the US from August 2014. In July 2018 he took up a new role of Business Development Manager for the UK and Europe, becoming employed by the respondent which is the group's UK corporate entity.[12]The respondent's group trades worldwide and has bases in Australia, the UK (Dunfermline), Vietnam and the US. In each of those territories there was some form of senior sales and/or business development presence, with responsibility for managing customer relationships and improving sales levels.[13]The claimant lived and was based in Manchester while employed by the respondent. He reported to Mr Graeme Jeram, the respondent's General Manager who was based at the respondent's premises in Dunfermline. There were around four other employees, also based there. The claimant would visit Dunfermline as required. This tended to be quarterly to catch up with Mr Jeram in person. He would also attend trade fairs and go to meet customers with Mr Jeram. Those were more occasional. They could involve a trip of more than one day, incorporating overnight stays in a hotel. The claimant also spoke to Mr Jeram daily by telephone.[14]For the rest of his time, which was the majority, the claimant would work from home, largely online and dealing with customers remotely, and he would also travel throughout Europe to meet with customers. Events of 29 and 30 August 2019[15]The claimant was asked to visit Dunfermline on Thursday 29 and Friday 30 August 2019. This was to help with moving some stock as part of internal building work taking place at the premises. A wall was being opened up leading to the adjoining property which the respondent had just bought.[16]The claimant travelled to Dunfermline early in the morning of 29 August 2019 and spent the rest of the day there. Along with his colleagues he moved stock away from some metal racking which was built into the wall at the point where it needed to be opened up.[17]During that afternoon, some time after 3pm, Mr Jeram came into the office area where the claimant was sitting with two other employees, Alan Tait and Ryan Lesslie. He asked if all of the stock had been moved. The claimant responded that everything had, save some scrap bars on the floor which didn't need to be moved. Mr Jeram replied, 'Sorry?' and the claimant repeated his answer. Mr Jeram replied, 'Said who?' and the claimant confirmed 'Me'. Mr Jeram then asked the claimant if he was going to sort out removal of the racking attached to the wall. The claimant responded that Mr Jeram would have to do it.[18]The conversation was witnessed by Mr Tait and Mr Lesslie. Although short, it quickly escalated to the point where Mr Jeram felt frustrated and walked back out the office. As he was doing so he said to the claimant 'If you're not going help then get in your car and fuck off back down the road', or words closely to that effect. He went to move the scrap bars which had just been referred to.[19]Later that afternoon the claimant approached Mr Jeram and said that he had put the claimant in a difficult position in front of the other staff, resulting in the above exchanges. Mr Jeram explained that he viewed the claimant's comments as undermining his authority. Both individuals' accounts of the remainder of the conversation are in sharp dispute. Mr Jeram says that the claimant apologised, and blamed the prevalence of workplace banter on his attitude and choice of words. He resolved not to engage in banter further if there was such a risk of being taken the wrong way by Mr Jeram. By contrast, the claimant says that Mr Jeram threatened him with the words 'If it were ten years ago, I would have dragged you outside by the throat.' The claimant says he felt intimidated and distressed, but felt he should stay at work for the rest of the day and help out further. There were no witnesses to this conversation. It is not possible to make a finding of whether Mr Jeram said the words which the claimant maintains he did or not. However, as discussed below, what is more relevant to the issues in the claim is the view taken by Mr Winfield.[20]The claimant remained on the premises until around 6pm that evening and left to stay in a local hotel overnight. He returned the next morning and there were no further problematic exchanges with Mr Jeram on that day. The claimant bought coffees for his colleagues. At one point, Mr Jeram took the claimant out for a short test drive of a new company Volkswagen car. In the afternoon Mr Jeram allowed the claimant to leave and head back home to Manchester. He was driving a new company vehicle. He exchanged text messages with Mr Jeram later that evening, to confirm he was almost home and Mr Jeram asked him how he found the new car. The claimant confirmed he was pleased with it. Mr Jeram wished him a good weekend and thanked him for his help over the last two days [108]. The following week[21]On Monday 2 September 2019 the claimant emailed Mr Winfield, who is the Group CEO of the respondent's group [111]. He is the person Mr Jeram reports to. Being based in Australia, it was the morning of 3 September when Mr Winfield received it. In the email the claimant outlined his version of the events of 29 August 2019. It was framed as a complaint about Mr Jeram's treatment of him. The one-to-one conversation between the two later in the afternoon was highlighted as being 'totally unacceptable, uncalled for, is intimidating, and has left me feeling anxious about and concerned for safety in the workplace.'[22]The clamant concluded the email by saying that 'since there was an obvious misunderstanding between us that led to the verbal threat, it would be beneficial in future for both parties that we restrain from any conversation of friendly banter or light heartedness that might be misconstrued as ridiculing or harassment. This way we remove any ambiguity and potential for situations like these to escalate as they did.'[23]Mr Winfield was surprised to have received the email. He had no previous knowledge of any difficulties between the two individuals. He responded to the claimant, apparently within two hours [113] to say that he would deal with the matter 'based on facts I substantiate and statements.' He copied in Mr Jeram to his reply and asked him to provide his own account of the events of the day. He said he would be seeking statements from others present and then decide on a course of action.[24]Mr Winfield also stated 'Additionally I need to know whether the two of you can work it out? As if the facts determine it and you cannot work it out I will need to then evaluate the events and positions and potentially engage a third party.' In evidence Mr Winfield confirmed that this was a reference to getting legal advice on the situation, if required.[25]Mr Jeram provided his response by email that afternoon or evening [117- 118]. He considered that the claimant was attempting to protect his own position in the matter by being the first to report it on his own terms. He gave his version of the events of the day. He concluded by giving his thoughts on the claimant's motivation as regards developing business with clients in the field as opposed to remotely. Mr Tait [115] and Mr Lesslie [119] also emailed their recollections to Mr Winfield on 3 September 2019, in response to his request [120]. Both individuals were able to describe the earlier exchanges in the office but were not present during the later conversation which the claimant was principally complaining about.[26]Mr Winfield read the four accounts of events on 29 August 2019 and emailed the claimant and Mr Jeram on 4 September to set out how he wanted to deal with the matter [121-122]. He told Mr Jeram that the use of profanity was not acceptable and that he should 'take a breath' and remain professional and clear in his communication with other employees. He stated 'Graeme you were wrong on how you communicated the issue and choice of words for which you need to apologise.'[27]Mr Winfield told the claimant that he could not validate the key accusation made, but considered that had it been made by Mr Jeram, it was more a 'statement of emotion and the past' rather than a live threat. He explained why he could understand Mr Jeram's frustration with the earlier conversation in the office that day. He noted that later that day and the next day matters seemed to return to normal.[28]He addressed the claimant by saying 'Justin – given the pressure to get things done – how you handled the events up to the "issue" was wrong and then during the tension laughing at the senior member in front of junior members was not acceptable and only resulted in increased tension.'[29]He went on to say 'I am happy to get on the phone and settle this verbally with you both on a call at the same time or 1. You two work it out together like adults with each other and move on or 2. You agree you cannot work together and let's make a separate decision'.[30]The claimant emailed Mr Winfield in response, copying Mr Jeram, later that day [123]. He revisited some of the facts of 29 August 2019 and stressed that 'the severity of Graeme's comment stuck with me and had me researching harassment and bullying law in the UK at dinner on Thursday night.' He went on to say 'Let me reinforce that the atmosphere at the warehouse is such that I do not feel comfortable nor safe in that work environment. 'If then your definition of working together means working in the same place/site then we perhaps need to consider option 2. Alternatively we can maintain a level of professionalism required and ensure work gets done.' Sales performance, merger and redundancy[31]It is important to record certain other events which were taking place at the same time as the matter between the claimant and Mr Jeram.[32]In late February 2019 Mr Winfield took a decision to dispense with the services of an in-field salesperson who was working alongside the claimant, named Julian Spender. He was providing his services at arm's length and was not an employee. The claimant notified Mr Spender by email on 2 March 2019 that his services would not be needed after 31 March 2019 [65].[33]From around June 2019 Mr Winfield had been in discussions over a merger between the respondent's group and another similar business in the same industry named Fulcrum. He and Mr Lloyd Oldfield, the owners of the respondent's group, were in negotiations with Graham and Nick Scudamore-Smith of Fulcrum. The merger completed at the end of November that year and the combined business now trades under the name Zeder Corporation.[34]As part of the merger discussions Mr Winfield proposed to remove four senior sales roles from the Redranger worldwide structure. Those are detailed in his email to the two Fulcrum owners on 2 September 2019 [109]. Two were based in Australia, one in the US and the fourth was the claimant's. Those were all of the sales roles of any seniority which existed. Mr Winfield considered that the sales performance of three of the roles was insufficient. This included the claimant's role. An aspect of his rationale was that the Australian business, which historically had supported the other worldwide divisions, had lost a significant contract in June 2019 which had brought in income of $1 million Australian per year. Also, Fulcrum had its own sales team, including in Europe. Those were service providers rather than employees. It was not therefore possible to pool Fulcrum sales employees with Redranger employees in a redundancy exercise.[35]The three sales roles other than the claimant's were made redundant. The USA Sales Manager left on 19 September 2019 [137]. The Australian based Private Label Sales Manager left on 10 September 2019 [131]. An Australian based National Account Manager left in March 2020. Mr Winfield had wished to have that person leave at the same time as the others, but there were some outstanding tasks to complete which required them to be retained. Mr Winfield had planned to make the claimant's role redundant as the same time as the other two also. That plan was superseded by the events of 29 August 2019 and the process which followed. None of the four roles have been replaced since.[36]Mr Winfield's email to the Fulcrum owners [109] was sent before he received the claimant's email of complaint about Mr Jeram [111].[37]Mr Winfield emailed his Financial Controller on 4 September 2019 to request a redundancy calculation as at Wednesday the following week [125]. The next day he updated Messrs Scudamore-Smith to say that the claimant had made his complaint against Mr Jeram [126]. He described him as 'the sales manager in the UK that was already tagged by me for early redundancy'. He was going to seek legal advice.[38]Mr Winfield emailed a note to himself on 6 September 2019, containing a set of thoughts on the redundancies [127-128]. This was for him to speak to at a meeting relating to the merger. He noted that the impact for customers in the UK would be minor under the new arrangement, which would involve Richard Fern, the third-party sales consultant used by Fulcrum, taking over the territory. Dismissal and subsequent matters[39]Mr Winfield wrote a letter to the claimant dated 10 September 2019 [129- 130]. The letter initially largely reiterated Mr Winfield's previous conclusions in relation to the events of 29 August 2019. He went on to say that he found it hard to believe that Mr Jeram had made the disputed threatening comment about taking the claimant by the throat.[40]Mr Winfield then wrote: 'In any event, after I emailed you on 4th September to either(1) sort out the issue like adults or else(2) you decided you could not work together and there would need to be a different decision, your response was that if working together meant working in the same place/site then you would consider option (2). 'I'm afraid Justin the only decision is whether you can work together or you can't. Graeme is your manager and has to deal and contact you on lots of issues many times during the week, and you still have to come to Dunfermline to do your job. It is not possible or realistic that you do not have normal interactions with him, or that he is not around when you are in Dunfermline. In addition, it is difficult if not impossible for Graeme to go back from the seriousness of what you allege he told you, and I very much doubt he could possibly have an effective management relationship with you from now on. 'Also, for the reasons above I personally do not believe Graeme said what you allege (even if there is no proof either way) and I do not wish to employ someone who I do not believe about such a serious allegation. 'As a result I consider there is a mutual breakdown in trust and confidence between you and the Company and that it is not possible or feasible for you to remain an employee. This means that this letter acts as notice of termination of your employment.'[41]The letter confirmed that the claimant's last day of service would be 10 September 2019, and that he would be paid in lieu of one week of notice as well as any accrued holiday pay. The claimant was offered a right of appeal.[42]Mr Winfield concluded by stating that: '…given the poor sales figures of the UK company and elsewhere across the group, I was imminently about to make your position redundant along with some other group sales staff. Your employment would therefore have ended in any event in the next few weeks.'[43]The claimant emailed Mr Winfield on 13 September 2019 to indicate he wished to appeal against his dismissal, giving five reasons why he challenged the decision. Those were: 1. 'It does not follow any disciplinary procedure that mirrors the ACAS guidance'; 2. 'The dismissal is from me raising a grievance/concern about my safety in the workplace'; 3. 'I have not had the opportunity to view or contest the witness statements'; 4. 'A previous 5 year unblemished record in terms of attendance, discipline, target achievement and business growth have been negated by one 'contested' statement'; 5. 'The actual need for me to work in Dunfermline has gone unheeded.'[44]Mr Winfield replied to the claimant on 19 September 2019 [135-136]. As he made clear, he had taken legal advice. He answered the claimant's points, in summary as follows: 1. It was appreciated that the ACAS Code had not been followed, but it was not thought to be applicable as the matter did not involve a disciplinary issue with the claimant, but rather a mutual breakdown in trust between the claimant and Mr Jeram; 2. The claimant had not been dismissed for raising a safety concern, but rather what he had said about no longer being able to work with Mr Jeram; 3. It was accepted that the claimant had not seen the statements of Mr Tait or Mr Lesslie, but seeing them would not have altered the fact of the relationship breakdown with Mr Jeram; 4. It was accepted that the claimant had no live disciplinary matters on his record; 5. It would not be possible for the claimant to do his job without coming to Dunfermline or by ensuring Mr Jeram was never present during any visit to Dunfermline.[45]Mr Winfield reiterated that he would have made the claimant's position redundant in any event.[46]The email concluded by saying that the claimant's appeal was unsuccessful and the original decision to dismiss him would stand. This concluded the process the respondent followed.[47]Post-dismissal, the claimant returned to Australia and sought alternative work there. He summarised his efforts in a note provided to the tribunal [156]. He provided details of positions he applied for, without gaining a role [157-166]. The respondent provided its own note of comments on the claimant's mitigation efforts [167-168]. The claimant expanded on his position in his evidence. The claim of automatic unfair dismissal under section 103A ERA[48]For a claim under section 103A to succeed, it must be established that one or more protected disclosures were made, and that doing so was the sole or principal reason for the individual's dismissal.[49]For there to be a disclosure there must be an imparting of information. A vague allegation of wrongdoing will not be enough. The claimant relies on the contents of his email of 2 September 2019 to Mr Winfield as being his disclosure.[50]For a disclosure to be a 'qualifying' disclosure under section 43B, the information given to the employer must, in the employee's reasonable belief, both be in the public interest and also be at least one of a number of listed types (a) to (f) in its nature. The claimant maintains that his disclosure(s) tended to show either that a person had failed, was failing or was likely to fail to comply with a legal obligation, and/or that the health or safety of any individual had been, was being or was likely to be endangered.[51]More specifically in his evidence, the claimant's position was that by virtue of Mr Jeram's alleged threat, the respondent had failed in its obligation to maintain a safe workplace for its employees and was likely to breach any legal obligation and/or health and safety responsibility towards other parties such as visitors to the premises, for example delivery drivers or other visitors, or staff.[52]A qualifying disclosure will be a protected disclosure if given to a permitted person. In this case the respondent, being the claimant's employer, would be such a person by virtue of section 43C.[53]It is found that the claimant did not make a protected disclosure in this claim. In making his complaint to Mr Winfield he did provide 'information' to his employer, namely the details of an allegation of threatening language and behaviour. However it is found that:a. Even if Mr Jeram had made the offending comment, while the claimant had a belief that a legal obligation had been breached or that an endangerment to health and safety had occurred, that belief when assessed objectively was not a reasonable one to hold. The comment complained of, if made, was isolated. It was a reference to something Mr Jeram might have done in the past, but not what he would do now or in the future. It did not carry any realistic threat that Mr Jeram would mistreat or be violent to any other person; andb. It was not reasonable for the claimant to believe he was making his disclosure in the public interest. The context was clearly a personal disagreement confined to the relationship between himself and Mr Jeram. The entire nature of the disclosure email is an account of the effect of Mr Jeram's behaviour on the claimant alone.[54]Had there been a protected disclosure by way of the claimant's email, it would have been found that it was not the sole or principal reason for the decision to dismiss, which is dealt with in more detail below. Essentially the claimant was dismissed because, rightly or wrongly, Mr Winfield genuinely believed that the claimant was saying he could no longer work for Mr Jeram, or at least not without unrealistic conditions being attached. That chronologically followed any disclosure made but was not by reason of such disclosure.[55]Therefore the claimant was not automatically unfairly dismissed under section 103A ERA. The claim of unfair dismissal under section 94 ERA[56]It is next necessary to consider whether the claimant was unfairly dismissed under section 94 and, in particular, section 98 ERA.[57]First it is necessary to establish the reason for dismissal and consider whether this is a permitted reason within section 98(1) and (2) ERA. The onus is on the dismissing employer to do so.[58]The respondent contends that the claimant was dismissed for 'some other substantial reason' within section 98(1)(b), which would therefore be a fair reason. This is accepted to be correct. There was a volume of evidence in the form principally of correspondence between the parties to show that Mr Winfield, the decision-maker, considered he had an employee who could no longer work for his manager. There was no evidence of any significance to suggest a different reason.[59]Next the requirements of section 98(4) must be considered, namely whether, given its size and resources, the respondent acted reasonably in implementing the claimant's dismissal for the reason it held. This assessment should be made 'in accordance with equity and the substantial merits of the case'. The onus is neutral in establishing whether this is the case.[60]Here it is found that the respondent fell short of the required standard. Whilst it was not bound to observe the ACAS Code of Practice on disciplinary and grievance procedures, nevertheless the procedure must be a reasonable one.[61]Considering the correspondence between the claimant and Mr Winfield over the accusation, it is striking that the claimant was dismissed only a week after raising his complaint. Whilst Mr Winfield formed a view in that time that the claimant could not practically speaking carry out his role because of the accusation he made against Mr Jeram, this may in fact not have been a correct assessment and in any event the decision taken was unduly rushed. When he offered two options in his email of 4 September 2019, the second of those was 'let's make a separate decision'. The claimant took the second option to be a form of invitation to consider adjustment to his role which would involve a more formal mode of communication between them and/or remove or reduce the need to be physically present with Mr Jeram alone. Whatever Mr Winfield did mean, it would not reasonably be taken to imply a unilateral and immediate decision to dismiss. His comment suggested a degree of consultation and consent.[62]The claimant's reply to that email was to say that 'perhaps we need to consider option 2.' He also said 'Alternatively, we can maintain a level of professionalism required and ensure the work gets done.' If Mr Winfield read that as an invitation to dismiss the claimant then that was unreasonable. The claimant at this point was still signalling a desire to explore ways to make the relationship work. There was evidence both in this email and the earlier material which should have been sufficient for Mr Winfield to realise that the claimant was not incapable of communicating with the Mr Jeram at all or even being in the same place as him.[63]This is the last input the claimant was able to have before it was decided to dismiss him. The discussion was prematurely shut down.[64]Had there been a proper discussion over this matter by way of even a telephone call or a videoconference, recognising that the parties were in two different countries, any confusion in understanding could well have been resolved. As it was, the process has the appearance of being brought to an end in a cursory manner amid other concerns which were deemed more material, and which would have brought about the dismissal of the claimant (who at this point was not thought to have the service to be able to claim unfair dismissal) in any event.[65]It is therefore found that the respondent did not meet the requirements of section 98(4) on the facts of this case, and therefore the claimant's dismissal was unfair. Alternative events, Polkey, and remedy[66]Despite the claimant's dismissal being unfair, the respondent makes a valid case for the dismissal being likely, if not certain, to have been effected in any case. The well-referenced authority of Polkey v A E Dayton Services Ltd [1987] UKHL 8 established the principle that where a dismissal is unfair, a tribunal may require to look at evidence of what would have occurred but for the dismissal, to decide on a fair amount of compensation. This does not allow the employer to challenge the unfairness of the dismissal, but they may be able to argue that compensation should be restricted because an event would have occurred which would have limited their responsibility for their ex-employee's losses. An employer may argue that had a fair process been followed, the individual would have been dismissed in any event, or they may seek to establish that another event would have occurred which would have a bearing on how compensation should be assessed.[67]The clear and substantial evidence in this case indicates that the claimant was about to be given notice of redundancy shortly after he raised his complaint about Mr Jeram. Given that two other senior sales staff were dismissed for redundancy in September 2019, it is accepted that the respondent would have done the same to the claimant but for the complaint and the decision to dismiss him for the relationship breakdown instead.[68]It is found that the respondent, had it been acting reasonably, would have given the claimant confirmation of his redundancy on 10 September 2019, which was the same day as the Australian salesperson was made redundant [131-132]. It would have been expected to undertake a degree of consultation with the claimant over the decision to make his role redundant and whether there were any ways of avoiding the claimant's dismissal. On the evidence there were few obvious options, however. The respondent would be expected to assist the claimant in terms of agreeing a reference and other aspects of seeking an alternative external role. They would recognise that the claimant would benefit from remaining in employment for a short time so as not to lose his right to remain in the UK whilst working. It is found that this would have extended his employment by two weeks. This is consistent with the final paragraph of Mr Winfield's dismissal letter of 10 September 2019. The claimant was entitled to five weeks of notice but received only one. He would also have been entitled to a statutory redundancy payment, which he did not receive.[69]It is not appropriate to reduce any award of compensation on the basis of contributory conduct on the claimant's part, or failure to mitigate losses.[70]Based on the above the respondent is ordered to pay the following to the claimant by way of compensation:a. A 'basic award' (also satisfying the requirement to make a statutory redundancy payment) of £2,625 based on the claimant's earnings (subject to the statutory cap), age and length of continuous service;b. Two further weeks' net pay representing the duration of a reasonable consultation period, amounting to £2,395.72; andc. Four weeks of net pay representing the balance of his notice entitlement not paid on dismissal - £4,791.44.[71]The total compensation payable is therefore £9,812.16.
Background
[1]This was a hearing in relation to the respondent's application for an expenses order under rules 74 to 84 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (the 'Rules').[2]The application followed a judgment in the claimant's claim which was issued to parties with written reasons on 21 June 2021. The claim involved complaints of unfair dismissal under section 94 of the Employment Rights Act 1996 ('ERA') and also a separate complaint of automatically unfair dismissal by reason of having made a protected disclosure under section 103A ERA.[3]In summary, the tribunal's judgment was that the claimant had not been unfairly dismissed because he made any protected disclosure, but that the unfair dismissal claim under section 94 was well founded. Although the respondent had dismissed the claimant for a potentially fair reason, namely the breakdown in the claimant's relationship with his manager, there was a lack of adequate procedure on the respondent's part in dealing with that.[4]Having found that the claimant was unfairly dismissed in the 'standard' sense, it was determined that he would have been fairly dismissed by reason of redundancy shortly after the date his dismissal actually took effect and therefore a substantial reduction was applied following the principle in Polkey v A E Dayton Services Ltd [1987] UKHL 8. Aspects of the judgment are discussed in more detail below as they relate to the application for expenses.[5]In addition to the papers considered in determining the substantive claim, I had available to consider:a. a letter sent by the respondent's solicitors to the claimant on 7 September 2020 in which a financial offer was made to settle his claims under explanation that an application for expenses may be made should the offer not be accepted and the claim proceed (the 'warning letter');b. the claimant's email of 13 October 2020 replying to the warning letter (the 'offer refusal');c. the respondent's application for an expenses order which was made by email on 1 July 2021(the 'application'); andd. the claimant's email responding to the application dated 20 July 2021 (the 'response'). Relevant law and principles[6]By virtue of rules 74 to 84 of the Rules an employment tribunal can make an order requiring one party to pay some or all of another party's legal expenses (referred to as 'costs' outside of Scotland) in certain circumstances. It is commonly known that unlike in court litigation where an award of expenses tends to follow success, an award of expenses is more the exception than the rule in the context of employment tribunals.[7]An employment tribunal has discretion to make an expenses order only if any of the circumstances referred to in rule 76(1) and (2) apply. One of those, as alleged by the respondent in this application, is that another party has acted 'unreasonably' in bringing or conducting the proceedings.[8]An application for an order can be made at any point up to 28 days after a final judgment or determination of the proceedings is sent to the parties.[9]Consideration should not be given to making an order until the party against whom the order is sought has had the opportunity to make representations in reply. Those may be in writing or at a hearing as the tribunal directs.[10]Employment tribunals have the power to make an order for up to £20,000 of expenses, or alternatively dictate that the procedure normally followed in the relevant regional court should be used where a higher sum is requested.[11]An award of expenses should compensate the party who applied for it in respect of costs incurred and not be granted as a punitive measure.[12]In deciding whether to make an order, a tribunal is allowed to consider the ability of the person against whom it will potentially be granted to pay it.[13]Employment tribunals have wide discretion in deciding whether an order should be made.[14]Essentially the process to be followed by a tribunal in deciding an application for an expenses order involves two steps: first, did circumstances within Rule 76(1) and (2) exist, and secondly, if so, is it appropriate to make an award of expenses – see for example Ayoola v St Christopher’s Fellowship UKEAT 0508/13. The second step is not automatically determined in the applicant's favour if they succeed on the first question.[15]Where a party is accused of 'unreasonable' conduct under Rule 76(1) that word should be given its ordinary meaning in determining whether they have acted in such a way.[16]A party intending to make an application for costs or expenses need not have intimated that in advance to their opponent, although it will often be good practice to do so provided they do not act oppressively in pointing out the alleged weaknesses in that party's case or the strengths in their own. Conversely, the issuing of what is typically called a 'cost warning' letter (i.e. the respondent's warning letter in this case) does not guarantee that an order will be granted if the outcome of the claim is as they predicted. The respondent's application for an expenses order[17]The basis on which the respondent sought an order for expenses was set out in the application and with reference to the other documents referred to in paragraph 4 above as well as the claimant's schedule of loss.[18]Mr Thornber asked me to consider those documents and his submissions involved highlighting what he saw to be the key points of the application.[19]He confirmed that the only circumstances alleged to justify an award were that the claimant had conducted his claim unreasonably by not engaging appropriately with the warning letter. This the claimant did by refusing the financial offer made, and continuing to seek an unrealistically high amount of compensation, first in settlement discussions and then before the tribunal itself. That position was said to be based in some respects on the claimant's schedule of loss which contained heads of loss or applied principles of calculating compensation which were not relevant or realistic.[20]Dealing with the 'standard' claim of unfair dismissal under section 94 ERA, Mr Thornber accepted that there were deficiencies in the respondent's handling of the claimant's dismissal as the substantive judgment had recorded. He submitted that despite that, there was clear evidence which was made available to the claimant at the time of the warning letter showing that the claimant's position was going to be removed as part of redundancy exercise triggered by the merger of the respondent with another business. This is what the tribunal had found as fact, before going on to heavily restrict the amount of compensation awarded to the claimant as a result. Through the application of Polkey the claimant was awarded two weeks' compensatory award.[21]Mr Thornber therefore argued that he had spelled out in advance in the warning letter just what the tribunal would conclude, and the claimant was unreasonable in not accepting the evidence at that time and therefore taking up the settlement offer made. The offer would have compensated the claimant for four weeks of lost earnings rather than the two weeks ordered by the tribunal, as well as the basic award which was separately granted. It was therefore more generous than the tribunal's ultimate award. Additional to that, it had been made clear in the warning letter that the respondent would make an admission of liability in the 'standard' unfair dismissal claim.[22]Further, he said, the claimant's offer refusal of 13 October 2020 also amounted to unreasonable conduct. In that email he put forward a settlement counter-proposal of £96,000 plus £20,591 for other heads of loss set out in his schedule of loss. The former figure was said to represent 12 months' salary. Mr Thornber raised that the correct figure in net terms would have been around £62,000. He also argued some of the other heads of loss were not relevant to the claim, such as an amount sought for personal injury.[23]Mr Thornber referred to the case of G4S Security Services (UK) v Rondeau UKEAT/0207/09/DA in highlighting that unreasonable rejection of a settlement offer may prompt an award of costs or expenses. He also referred to Sud v London Borough of Ealing [2013] EWCA Civ 949 which illustrated that an employment tribunal could make a substantial award where a party had conducted settlement negotiations unrealistically. Finally, he referred to the principles in Power v Panasonic (UK) Ltd UKEAT/0439/04 with reference to what he described as the unrealistically high value the claimant put on his claim and his intransigence in settlement discussions.[24]He also submitted that although the claimant appeared before the tribunal in person, he was an intelligent individual and the warning letter was written using plain and unthreatening language.[25]The amount of expenses sought was:a.£2,150 for preparation of documents including the hearing joint bundle, liaising with the claimant and the tribunal up to the hearing, and advising and liaising with the respondent;b.£3,600 for instructing the solicitor, Mr Burke, who appeared on behalf of the respondent at the hearing (£1,200 for preparation and the same figure for each day of the hearing);c.£200 for drafting the expenses application; andd.£450 for attending the expenses hearing including preparation.[26]The total figure claimed was therefore £6,400. As the respondent is able to off-set VAT against other VAT liabilities, no VAT on the award was sought. Response by claimant to the application[27]The claimant was given the opportunity to respond orally to the application, in addition to his written response which I considered.[28]His position remained that he was entitled to pursue his claims and effectively put the respondent's proposed defence to them to the test. He was firmly of the view that he was entitled to challenge the redundancy case in particular, as his experience was that he was performing well and there was no need to remove senior sales roles. It was not clearly inevitable that his role would be made redundant. He was aware that the merger was being negotiated. He considered himself to be on the executive team and as such would have expected to have known about any redundancies planned, and should have been retained within the business in any event post-merger.[29]He restated the point he had made before in the offer refusal that even of the respondent conceded the 'ordinary' unfair dismissal claim, it did not admit to dismissing him in response for making a protected disclosure. For him this was the principal claim.[30]He confirmed that he had been receiving advice from a firm of solicitors at the time that the warning letter was issued and when he sent his offer refusal in reply to it. The solicitors gave him help drafting the offer refusal.[31]He also received advice before preparing his schedule of loss and sending it to the respondent.[32]He did not take issue with the respondent's quantification of the expenses it was now seeking. He thought those were reasonable.[33]In relation to his ability to pay any award of expenses, his circumstances were essentially unchanged from the time of the hearing of his claim in May 2021. That is to say, he is still based in Melbourne which is subject to extensive lockdown measures. He is the 50% owner of a coffee shop which is currently limited in its earning potential as it can only provide takeaway orders and not accommodate sit-in customers. That accounts for all of his working time and he has no other sources of income. Discussion and decision Did the claimant act unreasonably[34]I have considered the claimant's conduct in relation to both of his two claims.[35]The first claim was the 'protected disclosure' unfair dismissal claim under section 103A ERA. As the claimant noted, the respondent did not concede that. In the warning letter Mr Thornber said that the claim was likely to fail because the alleged disclosure was not made in the public interest, and the claimant could not reasonably believe that it was. This was a finding later made in the tribunal judgment.[36]In the tribunal judgment it was found that the claimant had not made a protected disclosure for an additional reason, although that was not foreshadowed in the warning letter.[37]The second claim was the more common claim of unfair dismissal under section 94 ERA. This is the one which the respondent offered to concede in the warning letter and compensate the claimant for (albeit subject to a Polkey deduction). Essentially it was a fallback option for the claimant if he could not win on the section 103A claim.[38]In relation to both claims the respondent says that the claimant should have appreciated that any compensation would have been heavily restricted because of the intervening event of his redundancy.[39]I have noted what the claimant says in relation to his right to pursue his claims and put the respondent's evidence to the test. Whilst as a general proposition that is sound, there will be circumstances where the nature of the evidence should make it clear that a given complaint will have low prospects of success, or be limited in financial value.[40]The claimant had sight of, for example, emails between the respondent's owner Edward Winfield and representatives of the other business in the merger which was named Fulcrum. This included an email from Mr Winfield to various individuals on 2 September 2019 in which he referred to making redundant the four worldwide senior sales roles, one of which was the claimant's. In referring to the claimant he said: 'RRUK Sales manager – I have been tasking him on new account revenue for the last 12 mths had some wins but not enough – he is active on ecomm revenue – simply seeing no result so will let go in the next 2 weeks – nominal payout – also he will not fit with the new consolidate salary structure – little customer fall out'[41]This email is important as it predates the claimant's complaint about his line manager (also sent 2 September 2019 from the UK but received and read by Mr Winfield in Australia the next day) which he considered to be his protected disclosure and the cause of the respondent dismissing him which it did on 10 September 2019.[42]I am persuaded by Mr Thornber's point that the claimant had clear evidence of his employer planning to make his role redundant within two weeks of 2 September 2019 and doing the same in relation to three of his counterparts elsewhere in the world where the respondent operated. At the time of the warning letter, a year later, the claimant knew that those other three roles had then been made redundant, further supporting the respondent's case about his own circumstances. The evidence was created before his complaint which was said to be the trigger for his claims, and therefore could not have been manufactured in the knowledge of that complaint.[43]Therefore, whilst the claimant may have believed that he was senior enough to be kept in the loop about redundancies, including his own, and have expected that the respondent would have found a way to retain him if his role were removed, the evidence he was provided with along with the warning letter itself should have caused him to realise that his claim was heavily restricted in value.[44]I also consider it relevant that the claimant was taking advice from solicitors in relation to the warning letter and the offer refusal he sent back. So, whilst a layperson might be given more latitude in their grasp of such matters as the public interest test in relation to protected disclosures, or the application of the Polkey principle, an employment lawyer would be able to explain those concepts and their effects on his claim.[45]I therefore find that the claimant acted unreasonably as the term features within rule 76(1) of the employment tribunal Rules. He ought to have appreciated that his putative protected disclosure would not meet the statutory definition because it was not reasonable to consider it to be in the public interest, and he ought to have accepted the respondent's offer in any event because of the certainty and immediacy of his redundancy. Is it appropriate to make an award of expenses[46]As a separate matter following on from the above finding I must consider whether it is appropriate to exercise the tribunal's power to make an expenses order.[47]I have revisited the warning letter and agree with Mr Thornber that its terms were clear and unthreatening. It set out the respondent's case without being excessively forceful or exaggerated. In all key respects it correctly predicted the judgment the tribunal would reach. The concession of an unfair dismissal was offered. That was of potential value in itself as the claimant would have been able to demonstrate to a prospective new employer that he was not at fault for being dismissed. The settlement sum offered was reasonable in the context of the evidence, the key aspects of which were sent along with the letter.[48]The claimant's position in response strikes a contrast. In particular, he gave reasons why he considered the offer was inadequate, which were in summary:a. The unacceptable way his manager treated him in the incident prompting the alleged protected disclosure;b. A lack of adequate investigation or other process being undertaken in response to the alleged disclosure being made;c. His unfair dismissal which followed;d. His unblemished record;e. The difficulty he was experiencing in finding other employment.[49]The respondent's offer did take those factors into account as can be read from the warning letter, such as they were relevant. The claimant had the benefit of legal advice and ought to have known that.[50]The culmination of his offer refusal is a counter-proposal of £96,000 (equivalent to a year's worth of gross salary) plus an additional £20,591 said to be as specified in his schedule of loss. I am unable to link that figure to specific heads of loss in the schedule which was provided for the full hearing, but it appears to relate to injury to feelings, aggravated damages and interest. In any event it is an excessive overstatement of the value of the claim as the claimant should have realised.[51]I have considered the nature and amount of expenses being applied for. Those are reasonable as the claimant accepted.[52]I have also noted the claimant's submissions in relation to his ability to pay any award. Whilst I accept he does not have much disposable income at the current time that is related to his business not operating at its full capacity. That situation can be expected to change as local Covid-19 restrictions are eased.[53]Therefore, taking into account:a. the clarity, accuracy and persuasiveness of the respondent's case as put to the claimant as part of the warning letter;b. the stark contrast between the measured offer made by the respondent and the claimant's exaggerated response;c. the relatively modest amount of expenses being sought; andd. the claimant's current and future circumstances, I consider that it is appropriate in this case to grant the respondent an award of their claimed expenses in full and an order is made to that effect.