A Rostron v SENAD Ltd: 6011501/2025
JUDGMENT
The respondent’s application for costs pursuant to Part 13 of the Employment Tribunal Procedure Rules 2024 is granted to the extent outlined in this judgment.REASONS
[1]The claimant, Mr Alexander Rostron, was employed by the respondent, SENAD Ltd, from 19 February 2024 to 20 January 2025 as a House Manager.[2]The claimant had previously worked for the respondent from mid-February 2021. He resigned from that employment on 05 August 2023 and his final day working with the respondent was 04 September 2023. At that stage, he left the employment of the respondent and took up a job with a different employer who was wholly separate and distinct from the respondent.[3]The claimant claimed that he was unfairly dismissed by the respondent who terminated his employment following a formal disciplinary hearing on the grounds of gross misconduct. The dismissal was with immediate effect from 20 January 2025.[4]The respondent contested the claim on the grounds that the claimant only had eleven months of continuous service at the point of termination and therefore did not have the required service to bring the claim. The respondent contended that, as a consequence of section 108(1) of the Employment Rights Act 1996, the Tribunal did not have jurisdiction to hear the claim.[5]The matter was heard before me on 06 August 2025 at the Nottingham Tribunal Centre. Judgment was given on the same date. In that judgment, I concluded that the claimant’s period of employment with the respondent was approximately eleven months, from 19 February 2024 to 20 January 2025. The period of employment with a wholly separate employer from 04 September 2023 to 19 February 2024 was sufficient to break the claimant’s period of employment with the respondent. As such, I found that the claimant did not have the required qualifying period of two years’ employment to satisfy the criteria in section 108(1) of the Employment Rights Act 1996, and that the Tribunal did not have the jurisdiction to hear the claim. The claim therefore had no reasonable prospect of success and was struck out pursuant to rule 38 of the Employment Tribunal Procedure Rules 2024. Application for costs[6]The respondent made an application for costs at the conclusion of the hearing on 06 August 2025. A direction was made that any application needed to be submitted in writing, served on the Tribunal and on the claimant, by 20 August 2025. The claimant was ordered to serve any response by 03 September 2025.[7]On 14 August 2025, the respondent made an application for costs pursuant to rule 74(2)(a) and (b) of the Employment Tribunal Procedure Rules 2024. The basis of the claim was stated as follows: “The respondent submits that the claimant’s claim had no reasonable prospect of success because it was clear from the outset that the claimant had insufficient service to pursue a claim of unfair dismissal against the respondent. The respondent further submits that the claimant behaved unreasonably by continuing to pursue his claim after 13 May 2025, when the respondent wrote to the claimant on a without prejudice save as to costs basis with a “drop hands” offer. Within that correspondence, the respondent clearly explained to the claimant why his claim had on reasonable prospect of success as above. ….. The respondent wrote to the claimant on a without prejudice save as to costs basis a second time on 21 July 2025. The respondent reiterated the claimant’s lack of any reasonable prospect of success”.[8]The respondent included a schedule of hours with their application, setting out the dates that work was done in relation to the case, the time taken, and the value of the time. The total value claimed was £4,424.[9]On 19 August 2025, the respondent submitted a fee note from counsel and requested that the fee note be considered as part of the application for costs. The fee note was for the sum of £2,000 (excluding VAT). It was stated that the total value of the claim for costs was therefore £6,424 (exclusive of VAT).[10]On 02 September 2025, a response to the application was received from the claimant. He stated that he had pursued the matter solely as a consequence of the impact of the dismissal on his career, rather than for a financial settlement. He stated that he had requested reinstatement on the condition that he then immediately resign, but this was refused by the respondent. He did not specifically address the reasons for continuing with his claim notwithstanding the lack of qualifying service.[11]The claimant provided some information about his means, stating that he had been out of work since his dismissal in January 2025 until he took up a new role on 11 August 2025. He had not claimed universal credit or benefits as his wider household already received a benefits package, and so he had been living from his savings and money borrowed from family members. The Employment Tribunal Procedure Rules 2024[12]Part 13 of the Employment Tribunal Procedure Rules 2024 makes provision for costs orders, preparation time orders and wasted costs orders. The relevant provisions are: 72. Definitions In this part – “paying party” means a party liable to pay costs; ……. “receiving party” means a party entitled to be paid costs. 73. Costs orders and preparation time orders(1) A costs order is an order that the paying party make a payment to – (a) the receiving party in respect of the costs that the receiving party has incurred while represented by a legal representative or a lay representative, or (b) another party or witness in respect of expenses incurred, or to be incurred, for the purpose of, or in connection with, an individual’s attendance as a witness at a hearing. ….. 74. Where a costs order or a preparation time order may or must be made (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 proceeding, 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. ….. 75. Procedure (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). 76. The amount of a costs order (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, or by the Tribunal applying the same principles; (ii) in Scotland, by way of taxation carried out either by the auditor of court in accordance with the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019, or by the Tribunal applying the same principles; (c) another party or a witness, as appropriate, a specified amount in respect of necessary and reasonably incurred expenses for the purpose of, or in connection with, an individual’s attendance as a witness at a hearing; (d) an amount agreed between the paying party and the receiving party in respect of the receiving party’s costs. ….. 82. Ability to pay 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 communications[13]The claimant filed his ET1 on 03 April 2025. On that form, he stated that his employment started on 12 February 2021 and ended on 10 January 2025.[14]The respondent filed their ET3 on 28 April 2025. In section 4 of the ET3, they indicated that they did not agree with the dates of employment that had been given by the claimant and instead stated that his employment had commenced on 19 February 2024 and ended on 20 January 2025. An entry on the form stated: “The Claimant appears to have attempted to aggregate two periods of employment – an initial period between 15 February 2021 and 4 September 2023 and a second period between 19 February 2024 and 20 January 2025”.[15]In their accompanying Grounds of Resistance, the respondent stated: “1. The Respondent will contend that the tribunal does not have jurisdiction to hear the claim because the Claimant has insufficient service to bring a claim for unfair dismissal. The Claimant appears to have aggregated two separate periods of employment in an attempt to suggest that he had the requisite two years’ service to bring a claim for unfair dismissal, which is, in fact incorrect. 2. The Claimant’s first period of employment ran from 15 February 2021 to 04 September 2023. The Claimant was employed as a Senior Support Worker and resigned his employment of his own volition on 5 August 2023 to take up a new position. The Claimant served his notice until 04 September 2023. 3. The Claimant’s most recent period of employment ran between 19 February 2024 and 20 January 2025…… 4. As the Claimant does not have the required service to bring a claim for unfair dismissal (having only 11 months service at the point of termination), the Respondent makes an application for the claim to be struck out in its entirety”.[16]On 13 May 2025, the respondent wrote to the claimant to make a drop hands offer. In that letter, they stated: “As you will be aware from our ET3, we do not consider that your claim has any prospect of success on the basis that you do not have the required service to bring a claim of unfair dismissal. There was a break in your employment of 5 months between your resignation and subsequent re-hire which breaks your continuity of employment and means that you did not have the requisite two years continuous service to bring such a claim”.[17]In the letter, the respondent put the claimant on notice that, if he rejected the offer that was contained in the letter, an application would be made for a costs order to be made against him pursuant to rule 74 of the Employment Tribunal Procedure Rules 2024. Rule 74(2) of the Employment Tribunal Rules 2024 was quoted in full, and it was clarified that a costs order could include “fees (including legal fees), charges, disbursements or expenses that have been incurred by or on behalf of our client”.[18]On 21 July 2025, the respondent sent a further letter to the claimant. The letter restated the text as outlined in paragraph 16 above and also the additional information as outlined in paragraph 17 above. The letter further stated that “You have been unable to provide any documentary evidence to evidence continuity of employment”. Basis for application[19]The respondent is seeking a costs order pursuant to rule 74(2)(a) and (b), namely that the claimant has acted unreasonably in either bringing the proceedings or in the way that the proceedings, or part of it, have been conducted, and/or that the claimant’s claim had no reasonable prospect of success. Application for a costs order[20]In Radia v Jefferies International Ltd UKEAT/0007/18, the Employment Appeal Tribunal gave guidance on the approach that tribunals should take when considering making a costs order under what is now rule 74(2) of the Employment Tribunal Procedure Rules 2024 (then rule 76(1) of the Employment Tribunals Rules of Procedure 2013).[21]At paragraphs 61 and 62 of the judgment, His Honour Judge Auerbach stated: “61. It is well-established that the first question for a Tribunal considering a costs application is whether the costs threshold is crossed, in the sense that at least one of Rule 76(1)(a) or (b) is made out. If so, it does not automatically follow that a costs order will be made. Rather, this means that the Tribunal may make a costs order, and shall consider whether to do so. That is the second stage, and it involves the exercise by the Tribunal of a judicial discretion. If it decides in principle to make a costs order, the Tribunal must consider the amount in accordance with Rule 78. Rule 84 provides that, in deciding both whether to make a costs order, and if so, in what amount, the Tribunal may have regard to ability to pay. 62. At the first stage, accordingly, it is sufficient if either Rule 76(1)(a) (through at least one sub-route) or Rule 76(1)(b) is found to be fulfilled. There is an element of potential overlap between (a) and (b). The Tribunal may consider, in a given case, under (a), that a complainant acted unreasonably, in bringing, or continuing the proceedings, because they had no reasonable prospect of success, and that was something which they knew; but it may also conclude that the case crosses the threshold under (b) simply because the claims, in fact, in the Tribunal's view, had no reasonable prospect of success, even though the complainant did not realise it at the time. The test is an objective one, and therefore turns not on whether they thought they had a good case, but whether they actually did.”[22]The first stage of the test (the threshold test) is therefore an objective one. Here, the question is whether the claim, in fact, had no reasonable prospect of success at the start of the litigation, even though the claimant did not realise it at the time.[23]The second stage of the test is subjective - at the time, did the claimant know, or ought to have reasonably known, that his claim had no reasonable prospect of success.[24]I have kept in mind that the award of costs is an exception in the Employment Tribunal, rather than a rule [Gee v Shell UK Ltd [2023] IRLR 82].[25]When assessing whether the claimant’s conduct was unreasonable in either bringing the claim or in his conduct of it, I have given the concept of ‘unreasonableness’ its ordinary meaning. I also note the potential overlap between rule 74(2)(a) and 2(b) if the Employment Tribunal Procedure Rules 2024, in that pursuing a claim that has no reasonable prospect of success may also be regarded as unreasonable conduct. Is the threshold test made out?[26]Section 94(1) provides that an employee has the right not to be unfairly dismissed by his employer.[27]Section 108(1) of the Employment Rights Act 1996 states: “Section 94 does not apply to the dismissal of an employee unless he has been continuously employed for a period of not less than two years ending with the effective date of termination”.[28]Although the claimant had worked for the respondent for approximately fortytwo months in total, that total period was broken by a period of approximately five-and-a-half months whilst the claimant worked for a separate employer. During that time, there was no contract of employment in existence between the claimant and the respondent.[29]At the time of bringing his claim, the claimant therefore had only worked for the respondent for a period of eleven months, as the total period of his employment with the respondent was not continuous.[30]Objectively therefore, at the time of commencing the claim, the claim had no reasonable prospect of success as the qualifying criteria in section 108 of the Employment Rights Act 1996 was not met. Knowledge of the claimant[31]I do not have sufficient evidence before me to determine whether the claimant knew that his claim had no reasonable prospect of success at the time that the claim was commenced on 03 April 2025 and I therefore make no findings on this issue. However, the respondent served a full ET3 and grounds of resistance on 28 April 2025 in which they clearly set out the relevant dates and their assertion that the claimant had “insufficient service to bring a claim for unfair dismissal”. They repeated those assertions, with full reasons, in their letters of 13 May 2025 and 21 July 2025.[32]I am satisfied that the claimant therefore knew, from 28 April 2025 onwards, that his claim had no reasonable prospect of success. Notwithstanding that knowledge, he continued to pursue his claim to a hearing. I am also satisfied that, in the conduct of this case, this amounts to unreasonable conduct.[33]The threshold for making a costs order pursuant to rule 74 of the Employment Tribunal Procedure Rules 2024 is therefore met. Exercise of discretion[34]I must next assess whether I should exercise my discretion to make an order for costs.[35]I remind myself that costs in the Employment Tribunal are the exception rather than the rule.[36]In assessing whether to exercise my discretion as to whether to award costs, I must have regard to all of the circumstances, including the fact that the claimant is a litigant in person and may therefore not have the knowledge of law and practice of a professional representative. However, I also note that the respondent clearly outlined the legal position to the claimant in writing on three occasions and so he would have been aware of it from the 28 April 2025 onwards.[37]I conclude that, in the circumstances of this case, it is appropriate to make an order for costs in favour of the respondent. Amount of costs order[38]I must then consider the sum of the order for costs. The respondent is making an application for a costs order in the sum of £6,424 (exclusive of VAT). The claimant states that he was out of work from the date of his dismissal until 11 August 2025. During that time, he was not claiming any form of benefits.[39]On 29 September 2025 the claimant submitted information to the Tribunal regarding his income. He was made a conditional offer of employment, commencing on 11 August 2025, with an annual income of £27,300. However, it would appear that, at the time of the provision of the information to the Tribunal, he had not yet commenced employment as further pre-employment checks were outstanding.[40]I have taken the claimant’s ability to pay into account. I have determined that an appropriate figure for the claimant to pay is £1,000 and I make a costs order in favour of the respondent in that sum.Conclusion
[41]For the reasons outlined above, the application for a costs order made by the respondent is granted to the extent detailed in this judgment. Approved by: