United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr Bethune Representative


 


HIS HONOUR JUDGE J McMULLEN QC

1. This case is about Employment Tribunal procedure in an award of costs. We will continue to refer to the parties as Applicant and Respondent. It is an appeal by the Applicant in those proceedings against the Decisions of an Employment Tribunal sitting at Birmingham, Chairman Mr R F Ashton, promulgated with Extended Reasons on 11 February 2002, (the Amendment Decision), 12 February and 20 August 2002, Chairman Mr J van Gelder, (the Liability Decision and the Remedy Decision respectively). The Applicant was represented there and here by Mr Bethune. The Respondent was represented by a solicitor. The Applicant had claimed unfair dismissal and redundancy pay. The Respondent denied that the Applicant had been unfairly dismissed and met the redundancy claim.
2. The issue before the Employment Tribunal was to decide unfair dismissal. At the amendment hearing, the Ashton Tribunal dismissed an application by the Applicant to include a claim of race discrimination. The liability hearing ended in a Decision unanimously that the Applicant was unfairly dismissed. It then set a date for the remedy hearing. At the remedy hearing, the Applicant was awarded no compensation and was, instead, ordered to pay the Respondent a contribution to its costs, which were £1704, plus VAT we think,. The contribution ordered by the Tribunal was £500 in total.
3. The Applicant raised a number of grounds of appeal, including bias, apparent bias, irregularities in Tribunal procedure and errors of law. Following a very helpful exchange with Mr Bethune this morning, the majority of the grounds of appeal are not pursued and are dismissed. In our judgment, Mr Bethune has given careful advice to his friend and we note that a brief opportunity was extended to Mr Douglas to have the assistance of an ELAAS representative, who attended for some of the hearing. During these exchanges, the real point of Mr Douglas's case has become known to us, and shorn of what we regard as difficult issues, relating to the conduct of the proceeding, we are now able to see our way clearly to the real issues.
4. Several points are raised which will be surprising on first sight. The Applicant won the case and yet appeals; he won the case and yet had costs ordered against him. He complains that he had not had the opportunity to address the Tribunal on Polkey [1988] ICR 142 HL, yet the Tribunal made no deduction at the Respondent's instance. It was a finding wholly in his favour.
5. A curiosity of the case is that the application at the amendment hearing to include a claim of race discrimination was dismissed in very long and careful Reasons and yet at the end there appear the following words:

"In those circumstances, having regard in particular to the fact that the applicant is able to proceed with his complaint of unfair dismissal and to bring forth in that his complaint that his selection for redundancy was made on racial grounds, the application which was made late to include a specific, separate complaint of race discrimination is refused."

We asked Mr Bethune what he and Mr Douglas thought that meant. He said they were uncertain; so are we, for at the beginning of the remedy hearing, in notes which we have seen taken by a friend of Mr Douglas, the Chairman (Mr van Gelder this time) has ruled out any claim based on race. Thus the Decision at the liability hearing was made entirely on the basis of unfair dismissal.

6. We can understand the uncertainty which affected the Applicant and his representative. Nor has the matter been clarified by the comments by both of the Chairmen on the Applicant's affidavit, on his allegations of bias and racial discrimination by the Tribunal

Mr Ashton, in his comments, says this:

"We did though express the view that Mr Douglas would be able to [be]content that his selection for redundancy had been on the grounds of his race in support of his claim of unfair dismissal."

Again, it seems uncertain what the Decision was in relation to the amendment, since it is clear to us the Applicant was complaining not simply or racial discrimination during the course of the employment, but that his dismissal for redundancy was on racial grounds.

7. In any event, the Tribunal found in his favour on unfair dismissal, chiefly because the pool of those persons to be considered for redundancy had not been made wide or deep enough; others should have been included, whereas only the Applicant was considered by the Respondent. It was accepted that there was a great degree of flexibility between the staff working in the organisation, and, therefore, the dismissal was unfair and, on that basis, a remedy hearing was set up; schedules had been exchanged in advance of the hearing.
8. By dint of his reputation and his industry, the Applicant was fortunate to obtain a position with the Scarman Trust on 1 July 2001. The rate of pay, making various allowances for pensions and so on, was more favourable. He was paid, effectively, £23,701 as against £22,400, thus he suffered no loss. Those figures required some working out, and some assumptions to be made, particularly in respect of pension.
9. During the course of exchanges prior to the hearing, solicitors representing the Respondent had drawn attention to their impression that there was no loss, and that if the Applicant continued to maintain his case, they would seek costs. The Applicant raised a number of other heads of loss, including stigma damage, relying on BCCI -v- Ali [2002] IRLR 460. The Tribunal analysed that case and came to the conclusion as follows:

"So far from there being any stigma, the applicant had obviously established his reputation sufficiently well to justify being retained in their service, and furthermore, the applicant was then, happily, able subsequently on his first application, successfully to obtain a more highly paid post as a development manager in a very well established and respectable trust organisation. It appeared to the tribunal that there was no basis for an award of stigma damage in those circumstances."

That judgment appears to us to be correct. It follows from the BCCI case that an employer who deliberately runs a business in such a dishonest fashion as to make it difficult for employees to obtain work, is liable to be charged with an account for stigma damages. But on the findings of the present Tribunal, the Applicant did not get near to establishing that he had indeed suffered a stigma in the labour market, and thus we see no error in the Tribunal's approach. Further, that claim cannot be made in unfair dismissal proceedings.

10. The Applicant had also claimed the loss of certain personal effects. The Tribunal considered the evidence and decided that it could not be confident that it could make an award, under the heading, because there was not a sufficient connection between what the Applicant had asserted and the facts of the case. He had contended that while he was on secondment for fifteen months, various of his possessions, including treasured books and other personal possessions, had disappeared; he claimed for that loss. That, obviously, would be difficult to quantify, and the Tribunal decided against him. It is, of course, open to him to obtain redress in another forum if he can show that the property has indeed gone missing, due to the fault of the Respondent. It is doubtful whether his loss of these items is purely attributable to the acts of the employer in dismissing him under Employment Rights Act 1996 s 123(1), and this may be another reason for the Tribunal's finding about that matter.
11. Thus a number of heads were dismissed and the Tribunal awarded no compensation. That provoked the predicted claim for costs. The Tribunal decided that the claim for stigma damages was completely misconceived and that he failed to understand the basis upon which the concept was developed by the Courts; we cannot fault that judgment by the Tribunal.
12. It then turned to what it described as an "unrealistic expectation or lack of knowledge" in the approach to the compensatory award, pitching the claim some £30,000 in excess of the statutory maximum then in force. The effect of that was to give the Tribunal jurisdiction at the Respondent's instigation to decide that the conduct of the Applicant, solely in relation to the remedy hearing, justified the epithet as being unreasonable.
13. It is very important for the purposes of this case to put the award of costs into perspective. It relates solely to the costs of the final day of the hearing. It was based upon the recognition that the Respondent had been right in asserting that there was no loss on the arithmetic; the Applicant had been making more in his subsequent employment than he was before. It says nothing at all to undermine the force of the Tribunal's Decision in his favour on unfair dismissal; that remains clear and intact. The only reason he received no compensation was because of his own efforts in obtaining better paid work very quickly; it is a compliment to him. Had he not, the Respondent would have to pay.
14. The decision we make is based upon the high threshold which a party claiming that costs have been awarded wrongly has to get over. This is a matter of discretion; the Tribunal had heard all of the matters relating to the remedy and had gone through the calculations. We cannot say, as a matter of law, that the Tribunal was so wrong in principle in its award. It awarded considerably less than had been claimed by the Respondent.
15. All three of us have some unease about the outcome. An applicant who succeeded in his claim of unfair dismissal has failed to receive compensation and ends up paying £500 in costs. It is explicable only on close analysis of the arithmetic. Nevertheless, our jurisdiction is strictly limited to questions of law and, sadly, we do not regard the sole remaining part of this appeal as giving rise to a question of law which would justify a full hearing before the EAT.
16. We would very much like to thank Mr Bethune for the constructive and measured way in which he has represented his friend today, and taken us through the key issues in defining them. This appeal is dismissed.