United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	SUSAN DORIS (Of Counsel) Instructed by Messrs Penman Johnson Solicitors 5 George Street Watford WD1 8SQ
For the Respondent	MR K McCAVISH (Of Counsel) Instructed by Messrs Taylor Joynson Garret Solicitors Carmelite 50 Victoria Embankment Blackfriars London EC4Y ODX


 


MR JUSTICE LINDSAY

1. We have before us the full hearing of an Interlocutory Appeal in the matter Mr P M Butler against Sitel UK Limited. Today Miss Susan Doris has appeared for Mr Butler and Mr McCavish for Sitel UK Ltd; each had appeared for the same respective parties below at the Tribunal. Unusually it is an application before us simply as to costs. We will have to make several references to the four letter word usually referred to as "the C word" and we will just call it that or "C".
2. On 8 May 2000 Mr Butler was asked to accompany a senior manager to meet the Human Resources Manager at Sitel. He was suspended and was told that there would be an investigation into his alleged gross misconduct, which involved use of the 'C' word. On 11 May there was a disciplinary hearing. On 30 May there was a disciplinary appeal. On 10 August 2000 Mr Butler lodged an IT1 for unfair dismissal and for wrongful dismissal.
3. He said that he had been employed from 27 March 1999 to 11 May 2000 and in his IT1 he made a number of allegations. He said that:

"At 1.15 on 8 May 2000 and without any prior warning the Applicant was called into a meeting with the Human Resources Manager and Senior Manager. At the meeting the Applicant was confronted with a document, (a tick sheet), and asked if he was responsible for writing the word 'C' on it. The Applicant said that he could not recall ever doing this and in any event, confirmed that the words written on the tick sheet were not in his handwriting.

Despite his denial, the Applicant was told that the Human Resources Manager and Senior Manager had formed the view that the word was in fact in the Applicant's handwriting and furthermore that he had written the words 'love Paul' (Mr Butler is Paul Butler) underneath it. The Applicant was informed that he was to be suspended with immediate effect. He was informed that there was to be an investigation into his alleged gross misconduct. The Applicant was told that a meeting would take place on the 11^th May at 1.30 pm when the allegation would be discussed.

The disciplinary meeting was duly held on the 11^th May 2000 and was attended by Jason Jobbling, the Human Resourses Manager, Debbie Glenister, the Senior Team Manager, the Applicant and a note taker, Maria O'Sullivan."

A little later in the expanded IT1 Mr Butler says:

"The Applicant was advised that the formal allegation was that he had wilfully defaced an internal report that was seen by other team members and which the client had access to, with an obscenity that caused offence to another team member."

A little later still:

"After a short adjournment the Applicant was informed that the allegation against him was upheld on the basis that he could not deny having written the obscenity."

And the:

"The Applicant was informed by letter of 15 May 2000 that his contract of employment had been terminated."

4. So that was the outline of Mr Butler's complaint. On 22 August the Company put in its IT3. They said:

"The document in question is a tick sheet used by each agent to record the number of customer contacts made by each agent and is viewed by management and client personnel. On the 8^th May 2000 the document (tick sheet) defaced with 'C' and 'Love Paul', was discovered by another agent and was presented to management. Company policies and procedures state that the following standard is expected of all employees; staff should 'Use language and behaviour that is respectful and polite to clients, customers, management personnel and fellow employees' and that failure to comply with this set of company rules, may result in disciplinary action, up to and including immediate termination of employment."

A little later the Company says:

"Paul Butler was not sure if he had defaced the document and disagreed that it was in fact an obscenity and stated that in his opinion, it was a scribble or doodle. Due to the seriousness of the incident Paul Butler was suspended on full pay to allow further investigations, with his colleagues. Written statements were taken from his colleagues; one witness confirmed that he had seen Paul Butler write 'C' across the document."

5. And the disciplinary process was then described by the Company in its IT3. At some stage - it is not in our papers - the Employment Tribunal made a relatively standard sort of order requiring, amongst other things, that there should be an exchange of witness statements not less than 14 days prior to the hearing. Unfortunately neither side complied with that requirement.
6. On 8 January 2001, in the late afternoon - and this was in the light of a hearing fixed for 9 January 2001 - Mr Butler's solicitors phoned the Company's solicitors and they had a conversation. The 2 sides differ a little on what was said but what is inescapable is that it was at least Mr Butler's side that took the initiative in raising the subject of witness statements and their exchange. But no exchange took place on 8 January. The matter was due to begin on 9 January. Both sides attended and some 10 minutes before the hearing the witness statements were exchanged between the respective advisers of the 2 sides and the hearing began. It may be (but we do not attach importance to this) that the Butler side were there first and that the exchange could perhaps have taken place a little earlier if the Sitel side had been present earlier but, as I say, we do not attach any importance to that. The actual exchange was some 10 minutes before the hearing.
7. The hearing began and, still earlier on 9 January, Miss Doris appearing for Mr Butler applied that the hearing should break off or be delayed in order that the 2 sides should better be able to digest the then recently exchanged witness statements in order to have them in mind fully before proceeding further.
8. The Company by Mr McCavish either opposed that or certainly did not join in that application and the outcome was that that request for a brief pause was refused and the hearing went ahead. The Company, although Respondent, began, as is conventional, and completed its case, calling some 3 witnesses but not calling Miss Glenister. Some time relatively late on in the afternoon, as it would seem, the Sitel case closed and the Butler case began and that was the position at the end of the day. It had been fixed presumably for 2 days and the parties then returned on 10 January. On 10 January, early on or perhaps as the very first thing, the Company applied for an adjournment. It said that fresh issues had been seen in the witness statements that had been exchanged and received from the Butler side the day before and that the Company needed to call Miss Glenister to give evidence and that an adjournment would be necessary and the Company asked for the costs thrown away.
9. The Butler side opposed the adjournment, no doubt taking the point that the Company's case had closed and that the Butler side was willing and able to go on with its case and needed no adjournment and the Butler side asked for the Company to pay the Butler side's costs. The matter was adjourned and on 12 February a letter was written, a decision from the Employment Tribunal on the subject of costs. It may well be that this was orally announced actually on 10 January but it emerged that the formal decision was sent to the parties on 12 February. It is an order of the 3 person-Tribunal sitting at Watford under the chairmanship of Mr P Willans and is as follows:-

"Having listened to representations made by Counsel for the parties in relation to the question of the costs of an adjournment, the Tribunal were persuaded that it was appropriate to make an Order for costs in this instance against the Applicant albeit mitigated to some extent to reflect what the Tribunal felt was the failure on the part of the Respondents to completely carry out the terms of an earlier Order for Directions made by the Tribunal.

The Tribunal ordered the Applicant to pay to the Respondent costs in the sum of £300.00."

10. On 2 March 2001 a notice of appeal was received from Mr Butler; it relates to that order for costs and that is the only matter before us. On 22 March the Company put in a comprehensive answer to the notice of appeal.
11. There are 2 rules relative to costs at the Tribunal level. Rule 12(4) says: "Where the Tribunal has on the application of a party postponed the day or time fixed for or adjourned the hearing, the Tribunal may make orders of the kinds mentioned in paragraphs 1(a) and 1(b), against, or, as the case may require, in favour of that party as respect any expenses incurred or any allowances paid as a result of the postponement or adjournment." It is to be noted that the only costs capable of being ordered under this rule are costs incurred as a result of the adjournment.
12. The other provision is 12(1) which says: "Where in the opinion of the Tribunal a party has, in bringing or conducting the proceedings, acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably the Tribunal may make (a) an order containing an award against that party in respect of the expenses incurred by another party …… I need not read (b). There is no mention in the Tribunal's decision or order, as we have seen, of any frivolity or scandal or abuse and so on and so we must assume that it was rule 12(4) that was being exercised and not rule 12(1).
13. It is to be noted that 12(4) is a discretion. The Appellant, by Miss Doris, recognises that and has to put her case as high as saying, and does put her case as high as saying, that the decision here was perverse.
14. There are some notable features. First of all, both sides failed to exchange the witness statements as ordered. They would seem to have been equally in default in that regard. The Tribunal's remark about the Respondent's failure "to completely carry out the terms of an earlier order for directions made by the Tribunal" is a little ambiguous. Is it saying that they had completely failed to carry out the terms or had failed to carry them out completely in the sense that they had carried them out in part? It is not entirely clear what the Tribunal had in mind but, so far as was relevant, the earlier order for directions concerned exchange of witness statements and in that respect the Respondents had utterly failed to comply with the order just as, equally, the Butler side had utterly failed to comply with the order.
15. So there was something of a minor ambiguity there but perhaps nothing of any great significance. We have looked at the witness statements that were produced and it seems to us that there was no doubt but that the Butler witnesses went beyond what could reasonably have been expected from his IT1 and from the investigation and disciplinary precursors of the Employment Tribunal and that to that extent the Company had at some point a case for either an adjournment or a ruling that the Butler side could not be permitted to rely on the late and new allegations. But it has to be borne in mind that Miss Doris as Mr Butler's Counsel had suggested that time should be taken out for each side to consider the witness statements on 9 January and that the Company, as I mentioned earlier, either opposed that or at any rate failed to join in with it with the result that it was declined by the Employment Tribunal.
16. If the Company had agreed then to take time out in order to read the papers the Company's advisers would have seen that the new allegations were being made and might have seen also that the Company's existing witnesses who had been arranged to attend that day could not cope or could not cope sufficiently with those new allegations. But by not agreeing the plan to take time out to consider the witness statements the Company, it seems to us, was either gambling (without having read the witness statements) that there was nothing in them that would cause difficulty or had studied them but took the view that there was nothing that could not be dealt with. Indeed, having heard Mr McCavish's argument, it would seem to us that the position was that the Company had not read or sufficiently digested the witness statements, which had been lately received on 9 January. But whatever the position was as to whether the Company had read the documents or not, a later application by them that they needed an adjournment in order to answer the new matters was an application that was not innocent of blame or fault on the Company's part. The Company was saying, in effect, on 9 January, when it declined Miss Doris' application that time should be taken out to study the papers, that they wanted to go ahead regardless. If they had paused and had reflected then that they would need further time or further witnesses, then the hearing could have gone ahead as it did, hearing the Company's existing witnesses as far they could on 9 January and then, instead of coming back on the 10 January and wasting the cost of 10 January, the matter could have been adjourned more generally for the first convenient day on which Miss Glenister or any other witnesses needed by the Company could have attended and the wasted cost of attendance on 10 January could very likely have been avoided.
17. Even if the Company had applied for an adjournment at the end of 9 January at some stage in the afternoon before closing its case it could well be that the wasted cost of 10 January could have been avoided. It is also notable that the adjournment of 10 January was after the Company had closed its case. It was seeking, in effect, to reopen its case and to allow a fresh witness or witnesses to be added. By then the Butler side, having earlier been rebuffed in their attempt at a short adjournment on 9 January was willing and able to complete their case. It was the Company that was unready on the 10^th yet it was the Company whose case had by then been completed and closed.
18. It is an unusual situation. We put to Mr McCavish that if the opportunity has been taken, as Miss Doris had suggested, that time should be taken out to read the witness statements before further progress was attempted on 9 January, he would have seen that the witness statements did include (to use his word) "bombshells", but his answer to us was that they on their side had not then read the witness statements. But then they had opposed or not agreed to Miss Doris' application that time should be taken out on 9 January in order that they should be read. If they had been read the adjournment on the 10^th and the costs relating to it could very well have been avoided.
19. We recognise that a strong case needs to be made where perversity is the allegation especially in a matter so broad in its discretion as is the discretion as to cost. However, we do say here "My Goodness that cannot be right!" We do think that the case is one of perversity. We can only judge the decision by the very short order that we have read in toto because no separate or expanding reasons have been given but it does seem to us that the decision of the Tribunal was literally one of perversity. It does generate in us the reaction "My Goodness, that cannot be right!" Accordingly we set aside the order which was sent to the parties on 12 February 2001.
20. We do not, though, conclude that the Company should pay any cost of the hearing below of 10 January. Both sides had failed to comply with the earlier order and where a party (as was in the case on Mr Butler's side) introduces at a late stage significant additions to his evidence, matters not capable of being anticipated from his IT1, it becomes especially important for him to supply his evidence in good time before the hearing, which, of course, Mr Butler had not done. The Company had been unwise, in our view, in not pausing on 9 January to take up Miss Doris' suggestion that there should be a breaking off in order that the parties should consider their respective opposing witness statements. That was unwise and it was unwise, also, to have closed their case before having fully digested the Butler witness statements. But also the Butler side was at fault for not warning the Company of the departures in their evidence and in not exchanging sufficiently early to avoid the need for some breaking off in order that the late papers should be considered.
21. Having set aside the Employment Tribunal's order as to costs we see the proper order as to the costs falling within rule 12(4) as being that there should be no order as to costs. Accordingly we allow the appeal. The order of 12 February 2001 is set aside and there is no order as to the costs of the adjournment ordered on that day.