United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR D IBEKWE Representative Instructed by Mr J Neckles Public Transport (Staff) Consortium 87 Goldington Avenue Oakes Huddersfield HD3 3PZ


 


MR COMMISSIONER HOWELL QC

1. In this Appeal Ms Charanjit Kaur, an employee of John L Brierley Ltd, is seeking to challenge as erroneous in law the decision of Mr D R Sneath, a Regional Chairman of Employment Tribunals sitting alone at Leeds on 16 May 2000 ordering her to pay the costs of proceedings she had brought against her employer alleging unlawful deductions from her wages. These proceedings had been abandoned, without ever identifying the alleged deductions, but only after substantial costs had been incurred by the employers as a result of the way the proceedings had been conducted on her behalf; and only very shortly before the effective hearing of her claim (which had previously been adjourned on an application made on her behalf at very short notice) was due to take place.
2. Ms Kaur has throughout the proceedings, since their commencement by her originating application dated 9 November 1999, been represented by a Mr Francis Neckles acting in the name of the 'Public Transport Staff Consortium' (which we understand to be a small registered though non-certificated trade union established in 1996), and by Mr D Ibekwe who has appeared on her behalf as representative at hearings before the Employment Tribunal and before this Appeal Tribunal, on the instructions of the union as he confirmed to us. It is the way the proceedings have been conducted on Ms Kaur's behalf by these two individuals that has given rise to the making of the order for costs against her.
3. The history of the matter and the Chairman's reasons for making the order that she should pay the whole of the employers' costs, to be taxed in the County Court in accordance with the rules relating to a 'fast track' case proceeding in that Court, are summarised in the Chairman's statement of extended reasons sent to the parties on 18 May 2000, at pages 33-39 of the Appeal file before us. We have before us the adjourned preliminary hearing of the Appeal to this Tribunal against that order, and the question for us to consider is whether the grounds of appeal as put before us by Mr Ibekwe on Ms Kaur's behalf disclose a sufficiently arguable point of law to warrant our directing that the case should go forward for a full appeal hearing.
4. The originating application dated 9 November 1999, signed by the Appellant and by Mr Neckles in the name of the union on her behalf, alleged that there had been an unlawful deduction from her wages by the employer contrary to Section 13 of the Employment Rights Act 1996. The only explanation given of what this deduction had been was the allegation that she had been required to switch her pattern of shift working from a 40 hour week spread over 4 days to a week of the same length spread over 5, coupled with the allegation that this change had involved her being required to perform additional duties and to take on an increased workload "without commensurate increase in pay or earnings". The grounds of the application concluded "The Applicant hereby claims appropriate remedy for unlawful deductions pursuant to Section 24 ERA 1996. Full particulars of loss to be filed at a later date."
5. The Respondent's notice of appearance confirmed that the Applicant remained an employee of theirs but denied that any deductions had been made from her wages, whether as alleged or at all. It confirmed that following a reduction in turnover and the need to make redundancies the Applicant and other employees in her department (who worked on "beaming" which is part of the cotton spinning process) had been changed after consultation from a 4 x 10 hour shift pattern to 5 x 8 hour shifts, but stated clearly that "The Applicant has not lost earnings and is still working the basic 40 hour week at the same rate as she was on before the shift pattern changed": there had been no deduction from her wages and she had suffered no other loss. The notice also stated clearly that the Applicant was asked to particularise the deduction on which she relied, producing copies of relevant documents in support of her claim: see pages 45-46.
6. Despite this reasonable request, and repeated further requests and correspondence by the Respondent's solicitors, no satisfactory answer was ever provided by the Applicant's representatives to explain or identify the basis of her claim that she had suffered an unlawful deduction. The nearest they ever came was what was said by Mr Neckles in a letter dated 20 January 2000 which is before us at page 65 of the supplementary bundle supplied to us for the purposes of this appeal (though it seems doubtful if this document was supplied to the Tribunal Chairman at all: see paragraph 7 of his extended reasons at page 35 which make no reference to it). The letter said:

"The unlawful deduction /breach of contract claim are made up of two factors and are as follows:

1 Reduction of pay due to increase workload of 30%.

2. Reduction in contracted hours from 48 hour week to 40 hours.

We are however unable to calculate or provide the applicant's full particulars of loss. The reason being is because of your client refusal to confirm the applicant ever being on a 48-hour week, and that your client refused to confirm there ever being a contracted 48-hour week, which is now reduced officially on the 1^st October 1999. We will be relying upon the evidence at the main hearing by your client before we can calculate or submit an accurate remedy total.."

7. The reference to a "breach of contract claim" was to an attempt by Mr Neckles to get the proceedings amended by including an additional or alternative claim for damages for alleged breach of contract in the alteration of the Applicant's shift pattern. As recorded by the Chairman in paragraphs 5-6 of his extended reasons on page 35, that application had been made by a letter on 20 December 1999 from Mr Neckles, still referring to the change of shift pattern within a total of 40 hours a week rather than 48. The application to amend so as to add this further claim had been rejected on 11 January 2000, on the simple and irrefutable ground that there was no question of Ms Kaur's employment having terminated, so that there was no possible way the Employment Tribunal could have jurisdiction to consider a breach of contract claim at all. See Article 3 Employment Tribunals Extension of Jurisdiction Order 1994 SI No 1623; and the judgment of His Honour Judge Smith QC given on 26 January 2000, when Mr Ibekwe on instructions from the union on behalf of Ms Kaur unsuccessfully sought to challenge the Chairman's ruling by way of interlocutory appeal to the Appeal Tribunal (pages 66-75 of the supplemental documents).
8. What was said in the letter of 20 January 2000 was patently no kind of explanation at all for the failure to specify the nature of the case that was being alleged on unlawful deduction of wages: even allowing for the fact that it now sought to introduce, for the first time and in a somewhat oblique way, the allegation that the Applicant's working week had been reduced. We are quite satisfied that if her case was being conducted properly, the alleged deductions being relied on could and should easily have been identified, by reference to payslips or setting them out in a calculation. We found Mr Ibekwe's alternative explanations at the hearing before us (that the original reference to 40 hours had been an "obvious typing error", and in any case it was a "legitimate tactic" for the Applicant's representatives to withhold all this kind of information until the full hearing of the evidence before the Tribunal itself,) just as unconvincing as what had been said in Mr Neckles' letter.
9. Plainly it was necessary for the case of alleged unlawful deduction that was being asserted against the Respondents to be identified in a proper manner so that they knew the case they had to meet; and plainly it never was. This was despite what had been expressly said in the Respondent's notice of appearance, and their solicitors' letters dated 23 December 1999 and 18 January 2000 (pages 63-64 of the supplemental bundle), the first of which had ended by saying in the clearest possible terms:

"In those circumstances, we cannot see how your client can possible succeed in her claim. We therefore invite you to withdraw that claim immediately. If, notwithstanding this invitation, your client decides to proceed with the claim, then we will, if necessary, consider making an application for payment of our client's costs on the ground of her unreasonable conduct. If that is necessary then we will also draw the Tribunal's attention to her first application to the Tribunal which was later withdrawn. We will also, if necessary, show the Tribunal a copy of this letter.

In your client's originating application it was said that she would provide full particulars of her loss at a later date. If your client does intend to proceed with this claim then she should now provide full particulars, supported by relevant documents."

10. After the date of that letter, as already noted, Mr Neckles and Mr Ibekwe not only continued to pursue the Applicant's claim without identifying a proper basis for it, but sought to add to it with a breach of contract claim on a basis that was completely impossible, pursuing that attempt all the way up to this Appeal Tribunal at a full inter partes hearing of the interlocutory appeal on 26 January 2000, at which it was of course rejected. The effective hearing of the proceedings before the Employment Tribunal which had been due to take place on the following day, 27 January, had then to be adjourned on an application made (without prior warning) by Mr Neckles, on the ground that Mr Ibekwe (who had conducted the appeal hearing before the Appeal Tribunal the previous day) was now too ill to appear at all. The reasoned order of Mr Sneath granting the adjournment to a further date to be fixed, sent to the parties on 2 February 2000 (pages 16-17), contained the following measured observations:

"6 Whilst I find the situation on the applicant's side unsatisfactory, I feel bound to respect the applicant's wish that she should have the representative of her choice, not least since that person represented her only yesterday in the EAT. In making the decision to postpone the case, I am mindful of the powers of the tribunal to order a party to pay costs to the other party in the event of unreasonable conduct. Furthermore, I bear in mind that, if an order for costs is ultimately made, then it is proper for the tribunal to take into account not only the resources of the applicant but also those of the union that has been representing her. I observe that the applicant remains in the employment of the respondent and therefore has some means out of which to satisfy any order for costs which might ultimately be made.

7. I make those observations on the clear understanding that whether or not an order for costs is ultimately made will depend on what happens at the end of the day, whether an application is made and how the tribunal which hears that application deems fit to determine it."

11. After that, the case was relisted for hearing on 28 March 2000. On 10 March 2000, the Respondents' solicitors wrote to Mr Neckles referring to negotiations that had taken place between them about the disposal of the case on 26 and 27 January and setting out in detail the reasons why they had not accepted a proposal from him made on the evening of the 26^th, that the application should be simply withdrawn on terms that each side would bear their own costs. The letter (at pages 78-79) concluded:

"At the hearing on 27 January 2000 your client indicated that if the requested postponement of her application was not granted then she would apply for the claim to be withdrawn.

As we have not heard from you since the hearing on 27 January 2000, we assume that your client does now intend to proceed with her claim, albeit that she has still not provided details of the deduction upon which she relies and copies of relevant documents in support of her claim. We repeat the view which we expressed as long ago as 23 December 1999 that we cannot see that your client can possibly succeed in her claim.

If your client still decides to proceed with the claim then we will, if necessary, make an application for payment of our client's costs on the ground of her unreasonable conduct. Should she withdraw the claim then an application for costs will also be made. We enclose a schedule of the costs incurred by our client to date, including an estimate of the costs to be incurred at the next hearing.

Please let us know how your client intends to proceed."

12. The annexed schedule showed costs totalling £2344.46 excluding VAT. A significant part of this related to the costs of the appeal hearing before the EAT on 26 January, when the Respondents had been represented by Counsel. This letter was before the Tribunal Chairman at the costs hearing which eventually took place on 16 May 2000 and was referred to by him in detail in paragraph 9 of his extended reasons on page 36. What happened after that letter was sent can be taken from his paragraphs 10-13 as follows:

"10. Mr Neckles did not reply directly to that letter. Instead he wrote to this Office on 13 March saying that the Applicant had decided to withdraw her claim for breach of contract (unlawful deductions) against the Respondent company. He gave as the reason for her decision the fact that as of 6 March the Respondent had re-instated the original terms of the Applicant's contract of employment – "a creeler and beamer to one machine". He also purported to enclose a copy of a notice to employees by the Respondent. He failed to do so but it has been produced today. The document bears the title "Lost Ends". It concluded with this paragraph:-

"There is no change in the principle but all operators in the department should work together as a team, carrying out both beaming and creeling roles as appropriate. The exact organisation of who stands in front of the machine, who does the creeling, who sweeps the floor etc should ideally be sorted out within the team. Any problems in this area should be referred to Paul Bottomley straight away".

[We interpose that on 11 April 2000 the tribunal had issued a formal order made by another chairman dismissing the application on its withdrawal, together with a notice of hearing of the respondent's application for costs: pages 85-88.]

11. On its face, therefore, that document does not indicate a change in the working practice introduced in October 1999. Nor does it indicate restoration of a 48 hour working week.

12. The matter has been listed for hearing today. Mr Neckles in correspondence objected because he thought that, once the application had been disposed of, the Tribunal was in effect functus officio. I pointed out that was not the case. The Tribunal does have power to entertain an application for costs after an Originating Application has been dismissed on withdrawal. Indeed, the situation is not unusual.

13. On 25 April Mr Neckles asked for a postponement of today's hearing because of prior commitments both on the part of the Applicant and her representative Mr Ibekwe. That application was refused. It was repeated by letter from Mr Neckles dated 10 May in which he said again that the Applicant's representative had a prior commitment and could not attend. He added that it was in the interest of justice to the parties concerned that the representative should not be required "to disclose on record the reason or notice of the commitment referred to". In the event, Mr Neckles has attended today with the Applicant. He has submitted written representations. The Applicant and Mr Neckles did intend simply to sit at the back of the Tribunal but at the beginning of the case, I invited them both to sit alongside Miss Garnett. They agreed to do so and Mr Neckles has addressed me at length in opposition to the application."

13. The Chairman then dealt with the written representations and oral arguments which had been placed before him and expressed his conclusions as follows:

"18. Turning to the merits of the application, I find that the Applicant has acted unresonably in conducting these proceedings. In particular, she has failed throughout to identify her loss. Furthermore, she tried to make a significant amendment to her claim without explaining to the Tribunal or to the Respondent what it meant in terms of that claim. Finally, she gave a reason for withdrawing the application which I do not find convincing. The document upon which she relies in that connection does not support the reason, as I have indicated in paragraph 11 above.

19. The Applicant continues to be employed by the Respondent earning £140 per week. Mr  Neckles has refused to answer my question as to whether the union has any assets. My enquiry proceeded with the decision of the Employment Appeal Tribunal in Beynon -v- Scadden [1999] IRLR 700 in mind. In those circumstances, I think it appropriate for there to be a taxation in the County Court where any subsequent enforcement proceedings will take place so that, if necessary, those matters can be further investigated."

14. Against that decision Mr Neckles and Mr Ibekwe have sought to pursue an appeal on numerous grounds, set out in the original notice of appeal dated 28 June 2000. These seek to dispute the Chairman's findings on the question of unreasonable conduct and allege that he acted without jurisdiction, in breach of the rules of natural justice and was guilty of bias or misconduct; although happily not all these allegations were in fact pursued before us. A further ground of appeal was sought to be introduced by application by letter dated 16 November 2000, shortly before the first preliminary hearing which was adjourned on Mr Ibekwe's application on 30 November 2000.
15. Dealing with the additional ground sought to be included at paragraph (iv) under ground 1 of the proposed amended notice of appeal first, we consider that in the light of the way this case appears to have been dealt with and acted on by both parties below this does disclose a potentially arguable point on which it would be right for us to exercise our discretion to allow the amendment and direct that the case should go forward for full hearing. If what seems to have happened is in fact all the result of a misunderstanding, there is of course nothing to prevent the appeal on this aspect being disposed of on an agreed basis in the meantime.
16. The point is that as already noted, the main material identifying for the Chairman what costs were being claimed in the Respondent's application to him on 16 May 2000 appears to have included not only costs relating to the proceedings before the Employment Tribunal itself, but also the costs incurred by the Respondents of and incidental to the Appeal Hearing before this Appeal Tribunal on 26 January 2000. As to those, the order made on that date and the judgment of His Honour Judge Smith show quite clearly that no order was made by this Appeal Tribunal at all. It is further quite clear that the bill of costs submitted by the Respondents' solicitors to the County Court for assessment (pages 115-122 of the supplemental bundle) also includes substantial costs in relation to the Appeal as well as to the Employment Tribunal proceedings themselves. Mr Ibekwe informed us that his understanding was that the Respondents' solicitors were continuing to pursue the claim for the whole of those costs, and the County Court was proceeding with the assessment on that basis, the County Court having made it clear that it would not be deciding for itself that the appeal costs should be excluded from the total, but the proceedings on the assessment having in practice been suspended pending this present appeal to us to enable the point to be raised and determined at the Employment Appeal Tribunal.
17. In those circumstances, although it is true that the Chairman's order simply directs that the Applicant shall pay the whole of the Respondents's costs without purporting to make any order in respect of costs outside his own jurisdiction, we accept that it is arguable that after being presented with an application which on its face included the appeal costs, he may have erred in failing to differentiate between the appeal costs and those before the Employment Tribunal itself, in the decision he gave and the conclusions he expressed in paragraph 19 of his extended reasons at page 39.
18. We accordingly direct that the appeal should go forward for a full hearing on that one issue, and we further direct that the Chairman should be requested to produce his notes on any evidence or submissions to him at the hearing on the extent to which costs of and incidental to the appeal to the Employment Appeal Tribunal, as shown in the schedule annexed to the Respondents' solicitor's letter dated 10 March 2000 should or should not be included in any order for costs to be made by him.
19. None of the remaining grounds put forward in the notice of appeal, as sought to be argued by Mr Ibekwe on behalf of Ms Kaur, appeared to us to be arguable as a matter of law; and we accordingly now unanimously dismiss the appeal as regards all of them, leaving only the additional paragraph 1(iv) which we have allowed in by amendment. In considering the arguments sought to be put forward in these other issues we remind ourselves in particular of the principles recently and authoritatively re-stated by the President of the Employment Appeal Tribunal in Beynon - v - Scadden [1999] IRLR 700, to which the Tribunal chairman rightly referred in his final paragraph. In particular, the decision on whether or not to make an award of costs against a party who is found to have acted unreasonably is a matter of discretion for the Tribunal Chairman, and this Appeal Tribunal can entertain no challenge to the decision given unless it is shown that the discretion has been exercised wrongly, for example by taking into account some matter which should not have been taken into account, failing to take into account some matter that should have been, or in some other way coming to a conclusion at which no employment tribunal, properly directing itself, could have arrived: see the judgment in Beynon at paragraphs 14-15.
20. Applying the test for an appellate tribunal as laid down in that judgment, it is in our view clear beyond all argument that the decision to award costs in this case was one the Chairman was fully justified in making, and an entirely proper one. There was ample material on which he could rightly and properly conclude that the conduct of the proceedings by and on behalf of the Applicant had been unreasonable. She, or her representatives and advisers on her behalf, had persistently failed to identify what was the unlawful deduction they were alleging had been made from her wages, and that allegation was at the very heart of the case. They had failed to do so despite repeated and wholly reasonable requests from the Respondents' solicitors, which should have left them in no doubt whatever as to what was required. As noted above, the only attempt at explanation at the time was one which amounted to no explanation at all, and the alternatives put forward by Mr Ibekwe in argument before us long after the event were just as unsatisfactory. Notwithstanding their failure or inability to make out a proper case, they pursued the proceedings, causing the Respondents to incur additional and wholly unnecessary costs, right up to the point where an effective hearing was finally imminent: and then they suddenly withdrew, for a purported reason which the Chairman quite reasonably found unconvincing, as he explained in paragraph 11 of his extended reasons.
21. Nor in our judgment are there any arguable grounds for criticising the way in which the Chairman exercised his discretion, by ordering the costs to be taxed or assessed in the County Court, except in the one respect we have identified above relating to the possible inclusion of appeal costs. Paragraph 19 of his extended reasons, and his comment on the point in his earlier order dated 2 February 2000 after the hearing had to be adjourned on 27 January, show that he addressed his mind to the question of the ability of the Applicant, and (so far it was possible for him to do so) the union which had throughout been conducting the proceedings on her behalf, to meet costs. It would not necessarily have been an error, as pointed out in the judgment in Beynon, if he had omitted consideration of this altogether: but certainly in view of what happened here the Chairman cannot in our judgment be criticised at all for leaving the question of ability to pay as he did in that paragraph. We note this record of Mr Neckles' refusal to answer his question, despite the express assurance that had been given earlier in correspondence (Mr Neckles' own letter of 11 May 2000 at page 98) that if the Tribunal wished financial information about the union they would be happy to supply it.
22. Mr Ibekwe made subsidiary submissions, that the Chairman had erred in exercising jurisdiction over the costs application when another Tribunal Chairman had sanctioned the formal withdrawal of the application without dealing with the question of costs; and that bias had been exhibited by the Chairman's remarks and warning on the question of costs in the order of 2 February 2000 on the earlier adjournment. Neither of those points appeared to us to disclose any arguable error. The first was correctly dealt with by the Chairman in paragraph 12 of his extended reasons which we have already quoted, and in any case the position was made entirely clear by the Tribunal's direction issued on 11 April 2000, the same day as the formal dismissal of the application on withdrawal, that the application for costs was still outstanding and was to be listed for hearing in due course: see pages 86-87 of the supplemental bundle.
23. As regards the suggestion of alleged bias we reject the suggestion that the perfectly fair warning incorporated by the Chairman in his reasoned order issued on 2 February 2000 could indicate to any reasonable person that he might have closed his mind to the merits or otherwise of any application for costs should that come before him again in due course.
24. The remaining very diffuse allegations made in Mr Neckles' affidavit dated 29 August 2000 at pages 11-14 of the appeal file were, rightly in our view, not proceeded with by Mr Ibekwe, who confirmed expressly at the hearing before us that he was abandoning all allegations of bias on the part of the Chairman other than those arising from his comments in the order of 2 February 2000. We record our view that such diffuse allegations ought never to have been made in such a way; especially by a person purporting to act in a professional capacity as representative on behalf of an Appellant. We are satisfied that the allegations abandoned by Mr Mr Ibekwe were without foundation, and it was wrong for this further piece of unsatisfactory conduct on behalf of the Appellant to have caused the Chairman to be put to the trouble of dealing with them, (as he did in response to the standard direction given by the Emploment Appeal Tribunal Registrar when allegations of that kind are made: see his letter dated 19 September 2000 at pages 30-31).
25. None of the other points made either in the written grounds of appeal or by Mr Ibekwe in argument appeared to us to disclose any arguable point of law and accordingly as indicated above the appeal is now dismissed except as regards the one point we have allowed in by amendment.