Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2012/1428_11IT.html
Cite as: [2012] NIIT 1428_11IT, [2012] NIIT 01428_11IT

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THE INDUSTRIAL TRIBUNALS

CASE REFS: 1553/11

1572/11

1428/11

1555/11

CLAIMANTS: 1. William Anderson

2. Alistair Campbell

3. Stephen Whitley

RESPONDENT: Resource (UK) Limited

DECISION ON COSTS

The decision of the tribunal is that the claimants’ application for costs is refused.

Constitution of Tribunal:

Chairman: Mrs Ó Murray

Members: Ms G Ferguson

Mr J Norney

Appearances:

The claimants were represented by Mr G Daly of Francis Hanna and Company Solicitors.

The respondent was represented by Mr P Bloch of EEF NI.

REASONS

1. In a decision promulgated on 2 July 2012, this tribunal found for the claimants in their claim under the Working Time Regulations (NI) 1998 (as amended). Specifically the legal issue agreed by the parties was as follows:-

“Are the claimants entitled to leave under Regulation 13 of the Working Time Regulations or have the claimants with the exception of Mr Campbell lost their entitlement as they failed to make a request for particular days pursuant to Regulation 15.”

2. In Mr Campbell’s case, the issue between the parties was the level of compensation payable to him.

3. By letter of 6 July 2012, Mr Daly, on behalf of the claimants made an application for costs against the respondent in the following terms:-

“Please note that we request that an order is made directing the respondents to pay the claimants’ costs as they were aware that their actions were in breach of the Working Time Regulations and it was unreasonable for them to put the claimants’ union to the cost of having to prosecute these cases. We would respectfully refer you to paragraphs 38 and 39 of the decision.”

4. Mr Daly’s submissions can be summarised as follows:-

(1) That the respondent’s case was doomed to failure from the outset and that this view is supported by this tribunal’s findings at paragraph 38 and 39 of the decision, which state as follows:-

“38. We note, however, that Regulation 30(4)(a) requires us to look at the employer’s default when assessing compensation and this, in our view, connotes some form of penalty. The evidence we have in this regard is that the employees were told that their entitlement would be reduced and that this was because they were paid double for working the bank holidays. It was clear from the submissions made by Mr Bloch on behalf of the respondent, that the respondent knew that this reduction was in breach of the Working Time Regulations.

39. We regard it as reprehensible of an employer to mislead employees in this way. An employer is in a position of relative strength compared to employees in that the employer is in a position to know, or to find out, what the basic requirements of the law are in relation to annual leave. Essentially, the employer in these cases said that the employees were not getting their 28 days leave even though the employer knew that this was required by the Working Time Regulations. In these circumstances, it would not be just and equitable for the employer simply to have to pay a day’s pay for each day lost: there must be an element of penalty to reflect the seriousness of such a breach of a fundamental right.”

(2) That the respondent cannot say that it was entitled to have the matter determined as the law was clear as set out in the Working Time Regulations.

(3) That the respondent is liable to pay the fee of £2,500.00 plus VAT which was paid by the claimants’ Trade Union, the GMB in pursuance of an indemnity arrangement between them.

5. Mr Bloch’s submissions can be summarised as follows:-

(1) That the question of whether or not an individual had to give notice of intention to take holidays in order to protect his holiday entitlement, was open to argument at the time this case was argued before the tribunal.

(2) The legal point pursued by the respondent was one they were entitled to pursue and, at the time of the hearing, the position was unclear following the Kigass, Fraser and Larner decisions. The Larner decision has only last month been determined by the Court of Appeal.

(3) The fact that the respondent lost the legal point does not mean that costs should flow from that as there was a question to be determined by the tribunal and, on the only law available relating to holidays and sickness, the principle of “use it or lose it” was the prevailing authority.

(4) That the tribunal’s findings at paragraphs 38 and 39 related to the tribunal’s assessment of how the tribunal decided the value of the lost holiday.

(5) That the indemnity arrangement could have a bearing on the liability to pay costs and that this would require further information to be provided. In this regard, Mr Bloch invited us to make a decision on principle only.

6. Mr Daly referred us to a decision of Mr N Drennan QC on costs in a case of Cassidy, Garland and Magee v Belfast City Council [2012] NIFET 00146/10FET and in particular paragraphs 4.1 and 4.2 of that decision which set out the principles relating to costs derived from the case law which were relevant to that decision.

7. The relevant principles derived from the case law are as follows:-

(1) The tribunal must go through a two stage process in determining whether to award costs. Firstly, a tribunal must determine whether the respondent in conducting the proceedings acted unreasonably. Secondly, the tribunal must decide whether or not it is appropriate to exercise its discretion to award costs in the particular circumstances of the case. (See Criddle v Epcot Ltd [UKEAT/0275/05] and Khan v Kirklees BC [2007] EWCA Civ 1342.)

(2) Costs Orders are exceptional in nature in the tribunals where costs do not normally follow the event as in the Civil Courts. (See Gee v Shell UK Ltd [2003] IRLR 82).

(3) An Order for Costs must be compensatory and not punitive.

(4) The tribunal must have regard to the overriding objective and to the comments of Girvan LJ in the case of Peifer v Castlederg High School and Western Education & Library Board & Another [2008] NICA 49 where Girvan LJ stated as follows:-

“Tribunals should be encouraged to use their increased costs powers set out in the Rules of Procedure to penalise
time-wasting or the pursuit of cases in a way which unduly and unfairly increases the costs falling on opponents.”

8. In our view, the following observation is very important to bear in mind in this case:-

“The ordinary experience of life frequently teaches us that what is plain for all to see once the dust of battle has subsided is far from clear to the combatants when they took up arms.” (Per Sir Hugh Griffin in E T Marler Ltd v Robertson [1974] ICR 72.)

9. In the current case, there was a technical legal issue to be determined and it was not unreasonable for the respondent to pursue that to a hearing before this tribunal. The fact that both sides had to refer in detail to the current authorities at that stage namely the Kigass, Fraser and Larner cases, illustrates the point that the legal position, at that stage, required clarification. It is significant to us that the EAT view expounded in the Kigass and Fraser cases has been overturned by the Court of Appeal in the Larner case last month. An additional complication in the case before us was that the only available authorities related to long-term sick absence cases. There were no authorities relating to the case before us and it was not unreasonable for the respondent to seek to draw an analogy between the claimants’ situation and the decisions in Kigass and Fraser.

10. The paragraphs in our decision which criticise the conduct of the respondent relate to our assessment of the culpability of the respondent when assessing their liability to pay damages and the sum to be awarded. Our criticism of the respondent in that context does not amount to us deciding that it was unreasonable for the respondent to seek to take the technical legal point and have it determined by a tribunal.

11. We therefore find that the respondent did not act in an unreasonable manner within the meaning of the Rules and we therefore decline to exercise our discretion to award costs against the respondent.

Chairman:

Date and place of hearing: 25 October 2012, Belfast.

Date decision recorded in register and issued to parties:

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