Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2011/00357_11IT.html
Cite as: [2011] NIIT 357_11IT, [2011] NIIT 00357_11IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 357/11

CLAIMANT: Colin McClelland

RESPONDENT: RTU Limited

DECISION ON COSTS

The unanimous decision of the tribunal is that the claimant should make a contribution to the costs of the respondent amounting to £3,000.00.

Constitution of Tribunal:

Chairman: Mr S M P Cross

Panel Members: Mr R McKnight

Mr I Foster

Appearances:

The claimant was represented by Mr G Daly of Francis Hanna & Company Solicitors.

The respondent was represented by Mr B Mulqueen, Barrister-at-Law, instructed by John McKee and Son Solicitors.

REASONS

1. This decision should be read in conjunction with this tribunal's main decision in this case (“the main decision”), which was issued to the parties on 25 August 2011.

2. In these proceedings the claimant had made a complaint of unfair dismissal against his employer, the respondent. The outcome of the proceedings was that a complaint of unfair dismissal was upheld but the claimant was entitled to no compensation for his unfair dismissal because, in the view of the tribunal, it was 100% certain that in the economic climate in which this dismissal occurred that the claimant would have been made redundant almost immediately. For these reasons the tribunal held that the rule in the case of Polkey v AE Dayton Services Limited 1987 [IRLR] 503, hereinafter referred to as (“the Polkey case”) applied and that, although the dismissal was unfair, the claimant was only entitled to a basic award and no compensatory award. The tribunal therefore awarded a basic award amounting to £1,520.00.

3. It now transpires that some weeks before the hearing of this claim, on 8 June 2011, the solicitors for the respondent wrote to the solicitors for the claimant in the following terms.

“We refer to the above matter and confirm our client's willingness to settle this claim at £15,000.

If your client rejects this offer and loses this case and/ or is awarded compensation less than £15,000, we will make use of this correspondence in an application for costs.”

4. The respondent now makes an application for costs under Rule 40(3) of The Industrial Tribunal's (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (hereinafter called “the Rules”). The circumstances specified in Rule 40(3) are, that the claimant has, in bringing the proceedings, “acted vexatiously, abusively, disruptively or otherwise unreasonably”. In these circumstances the tribunal shall consider making a costs order against the party who has so acted, called in the Rules “the paying party”, if the tribunal considers it appropriate to do so.

5. Under Rule 41(1)(a) of the Rules, the amount of the costs order, which must not exceed £10,000, will be awarded by the tribunal and is to be such sum which “the tribunal may specify…. which the paying party must pay to the receiving party.”

6. Under Rule 41(2), the tribunal may have regard to the paying party's ability to pay, when considering whether it shall make a costs order or how much that order should be. The claimant did not rely on this provision in his arguments before the tribunal.

7. This application for costs was made on the basis that the claimant, by rejecting the offer of settlement, acted unreasonably in continuing with the proceedings. The tribunal agree with this proposition, especially taking into account the state of the building trade at the time of the dismissal. The evidence that had been given to the tribunal at the substantive hearing was that the sales of the product, Ultraflo had suffered a very great decrease prior to his dismissal and the whole building industry in Northern Ireland was in a serious state of recession. The claimant as business development manager would have known the state of the building trade and the market which was operating and he would have known the serious difficulties being encountered by the respondent. In these circumstances the claimant should have realised that there it was almost inevitable that there would be a redundancy situation in the sales and marketing area of the respondent business. The tribunal found, that had the claimant not been dismissed when he was and had there been a proper redundancy exercise, involving the claimant and Mr Philip Smith, it was 100% certain, that in the economic climate then prevailing, that the claimant would have been made redundant almost immediately.

8. For these reasons the tribunal held that the rule in the Polkey case applied and that although the dismissal was unfair procedurally the claimant was only entitled to a basic award and no compensatory award.

9. Whilst the tribunal has sympathy for the claimant, it holds that it must exercise its discretion to award costs in this matter, as, in the view of the tribunal, the claimant was unreasonable in continuing with the case after receiving the very clear letter from the respondent's solicitors, bearing in mind the senior position that the claimant held in the company, linked with his experience in and knowledge of the building industry and its difficulties at that time.

10. In considering this matter the tribunal was guided by the decision in the case of Kopel V Safeway Stores plc. 2003[IRLR] 753, in which Mitting J, in the English Employment Appeal Tribunal made it clear that the High Court procedure known as the Calderbank procedure, of costs being automatically awarded against a party who fails to win an amount greater than that which is offered prior to the hearing of the case, has no place in tribunal procedures. The tribunal has to be satisfied that the claimant was unreasonable to proceed with the case in the light of the offer. It is only if the tribunal so decides that costs can be awarded. In this case the tribunal is satisfied that the claimant was unreasonable in his refusal of the offer and award a sum of £3,000.00 to the respondent.

Chairman:

Date and place of hearing: 21 October 2011, Belfast

Date decision recorded in register and issued to parties:

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