Appeal No. EAT/0600/02 ILB

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 November 2002

Before
HIS HONOUR JUDGE J McMULLEN QC
MS S R CORBY
MISS D WHITTINGHAM

MR R BABB	APPELLANT

(1) GOVERNING BODY OF PASSMORES SCHOOL	RESPONDENTS
(2) ESSEX COUNTY COUNCIL

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR PETER CARR
(Representative)
Instructed by:
Harlow Welfare Rights & Advice Service
2 East Gate
Harlow
Essex CM20 1ND	

HIS HONOUR JUDGE J McMULLEN QC

1	This case is about costs and constructive unfair dismissal.  The Applicant appeals against the decision of an Employment Tribunal sitting at Bury St Edmunds, Chairman Mr D W Skinner, on 4 March 2002, promulgated on 16 April 2002.

2	The Applicant complained of constructive unfair dismissal consisting of the fundamental breach of the implied term of mutual trust and confidence by the Respondent’s failure to provide safe work, equipment and support for the Applicant to keep safe the workshops with which he was charged.

3	The Applicant was represented by Mr Carr who has again represented him today.  The Respondent was represented by Counsel.  We will continue to refer to the parties as Applicant and Respondent.

4	The Applicant had contended that he was entitled to leave the employment of the Respondent by reason of its fundamental breach.  The Respondent denied dismissal and acting unfairly.  The Employment Tribunal found that the Respondent did not dismiss the Applicant and dismissed his claim.  The Respondent sought an order for costs and the Tribunal awarded £3000.

5	The Applicant was employed by the Respondent as a Craft Design Technology Technician and Maintenance Technician from 1994.  The Respondent is a school under the control ultimately of the second Respondent, the County Council.

6	On 8 March 2001 the Applicant sent a resignation letter giving eight weeks’ notice.  The Tribunal found that the letter and the surrounding communication said little to suggest that the Applicant felt compelled to resign because of the Respondent’s alleged repudiatory conduct.  It went on to find that he indicated a concern to be granted favourable retirement and pension terms.  The effective date of the termination was 30 April 2001.

7	In his Originating Application of 13 July 2001 he made his allegations but a Chairman ordered on 3 October further particulars to be provided, which was done on 15 October.  Prior to the further particulars the Chairman making the order considered the Originating Application as “vague and general”.

8	The Employment Tribunal considered that, the further particulars, the Applicant’s witness statement, his evidence in chief in addition to that, and his cross-examination at the hearing.  It held that he presented:

6	“…a catalogue of alleged incidents, episodes, failures and deficiencies and sub standard and irresponsible behaviour of, by and involving the Respondent and other employees and students or pupils at Passmores School over the whole period of the Applicant’s employment there, although deteriorating markedly (so he contends) from around September 1999.”

9	The Tribunal was unimpressed by the Applicant’s evidence and afforded it little weight.  It described a “wholesale variance between the evidence given or indicated in his papers at different times and received in testimony” at the hearing.  The Tribunal found the Applicant “hesitant, uncertain and defensive”.  He was:

7	“…not able to give any reliable description of specific occasions and breaches of disciplinary, health and safety or other standards of conduct, or of the Respondents ever having failed to address any issues which he brought to their attention.”

The Tribunal found that his explanation was:

7	“…singularly unsatisfactory as to why and how he came to resign when he did, promptly finding other work more to his liking, and expressing himself as he did in writing at the time (…in his resignation letter) in terms which fail to spell out the supposedly pressing matters subsequently relied upon to support his complaint of unfair, constructive dismissal.  No consistent, credible account emerges of any serious or sustained failings by the Respondents, or of the Applicant contemporaneously entertaining any real employment grievance about such failings.”

The Tribunal found his evidence to be “low key, vague and generalised” about concerns over the years, none of which he formally reported or registered as a grievance.

10	The Tribunal expressed considerable sympathy in that the Applicant was finding it increasingly difficult to withstand stresses of working in a challenging school environment, as he approached retirement age, and what he found to be less congenial management regimes. It went on to say that it was these matters which principally gave rise to his apprehension and caused his resignation.  These included the failure, as he put it, by the employers to recognise his status properly and that he became more accountable to others in the chain of responsibilities.  The Applicant had himself described his anxieties as “more concerns than complaints”.  Whatever sympathies it had for him the Tribunal did not put his troubles as higher than “ordinary wear and tear of the job”.

11	The Tribunal addressed itself correctly to the relevant sections of the Employment Rights Act 1996, principally section 95(1) (a) and the jurisprudence emanating from Western Excavating (EEC) Limited v Sharp [1978] IRLR 27.  It took an analytic approach to that authority, seeking to answer questions:

“(i)	Was there a repudiatory breach?
(ii)	Did the Applicant resign by reason of such repudiatory conduct?  Was that conduct the effective cause of his resignation?
(iii)	Did the Applicant resign without excessive delay?”
As an approach, that is unimpeachable.

12	The Tribunal found that the burden of proof on all of these issues was upon the Applicant, to satisfy it on the balance of probabilities that each of these questions could be answered positively.

13	As a matter of procedure the Employment Tribunal invited the Applicant to give his evidence first, which is, of course, consistent with a denial by an employer that it has dismissed and consistent with the approach the Tribunal set itself to answering those questions which we have recorded above.

14	Unusually, the case stopped at half-time, because after all of the Applicant’s evidence, and we think at least one other person, Counsel for the Respondent submitted there was no case to answer, since the Applicant had accepted himself, under cross-examination, that none of his concerns amounted to a complaint of any breach by the Respondent of its responsibility as an employer in its treatment of him.  As Counsel put it “such concerns as there were at that time were all resolved”.

15	The Tribunal looked at three specific incidents which it found could have amounted to a breach of contract and rejected each of those.

16	The Applicant’s representative, Mr Carr, was given the opportunity, of course, to respond to the application to dismiss the case at half time.  The Tribunal upheld the Respondent‘s contention, holding there was “certainly no fundamental breach of contract”.

17	The reservations which it has expressed and which Mr Carr criticises, it found to have been compounded by hearing all of the Applicant’s evidence in support of his complaint which, as the Tribunal put it, “only confirms that there is no basis for it in law or fact”.

18	The Tribunal went on to say:

17	“We cannot eradicate the suspicion that the purported reasons upon which the Applicant now relies in contending that he was constructively dismissed were raised after his resignation to threaten Tribunal proceedings as a means of seeking financial benefit from the Respondents in his few years remaining before retirement, having been rebuffed in his resignation request for consideration of redundancy or severance pay and early retirement provision.”

19	The Tribunal said that, if it were wrong about its approach to these concerns or complaints nevertheless, the Applicant had not made out a case of constructive dismissal.  It found that he had scarcely alleged that the Respondent had conducted itself in any fashion which breached responsibilities in respect of health and safety or otherwise.  It went on to find that:

18	“the true reasons for the Applicant’s resignation are plain from his resignation letter which makes no reference to the supposedly serious safety concerns which had driven him to resign
19	Accordingly we conclude without hesitation that there is no case to answer and dismiss the application.”

20	The criticism made on the Applicant’s behalf by Mr Carr includes a criticism of the procedure adopted in stopping the case at half-time.  He referred to Ridley v GEC Machines [1978] 13 ITR 195, EAT, Philips J presiding with members as follows:

“…there may be:
‘…exceptional cases…ordinarily, at all events, it is better to hear what everybody has to say’.”

That of course is good law and certainly is the case in discrimination.  But the Tribunal regarded the case before it as one which was exceptional.  It actually categorised this as:
24	“…one of the weakest cases of alleged constructive dismissal which we have come across in our collective experience.”

21	Given its correct direction as to where the onus of proof lay and its discretion to conduct the proceedings justly in the way that it sought fit, there can be no error in it requiring the Applicant to put his case first.  The case could hardly get better if witnesses for the Respondents were called and cross-examined.

22	In our judgment, Counsel cannot be criticised for making an application on behalf of the Respondent at half-time, nor can the Tribunal be criticised in acceding to it where essential elements of the claim for breach of contract had been found not to have been proved by the Applicant at the appropriate time.  There is no right in the Applicant to require the Respondent to give evidence, although in this case witnesses were standing by and witness statements had been exchanged.

23	The approach of the Tribunal to the finding that there was no constructive dismissal cannot in our judgment be faulted.  It has documented in its reasons the assessment of the Applicant’s claim, based on breaches of contract wholly, individually or in aggregate and it has given its reasons for rejecting the claim.

Costs

24	The second part of the appeal is based upon the award of costs.  The Tribunal acknowledged that the Respondent’s application caused it concern.  It found that: “The Applicant’s case is fanciful and flies in the face of his own evidence”.  It upheld the Respondent’s claim that the Applicant’s complaint of unfair dismissal was concocted and was thoroughly misconceived.  It noted that the Applicant had been offered £500 in settlement for economic reasons.

25	The Tribunal addressed itself to Rule 14(1) of the 2001 Rules and the interpretation given by Regulation 2(2) to the word “misconceived” as “having no reasonable prospect of success”.  This application was presented before the coming into effect of these Rules but by Regulation 14 there is no transitional measure and thus the Tribunal was correct to apply the 2001 Rules when it considered the application for costs.

26	The Tribunal noted that the Respondent had pointed out to the Applicant, through the ACAS officer, the power of the Tribunal under Rule 14 to award costs where a party has brought or conducted proceedings vexatiously, abusively, disruptively or otherwise unreasonably, or where the bringing or conducting of the proceedings had been misconceived.

27	The Tribunal noted that the settlement offer had been rejected.  The Tribunal then decided that the Applicant had acted unreasonably.  It went on “Equally certainly, the proceedings are misconceived”.  Those are two findings which upon its primary substantive finding it was entitled to make.  It went on then, however, to say

“Furthermore, we are satisfied that the Applicant has acted vexatiously and abusively…in pursuing this claim in the context adverted to above, namely that he was to a significant degree prompted to take that course of litigation less in the belief that he had been unfairly dismissed (or indeed constructively dismissed at all) but rather to press his request for some enhanced termination payment or pension entitlement as he approached retirement age”

28	The Tribunal did not condemn that motivation out of hand, nor did it disparage the Applicant’s genuine unhappiness and his natural wish to retire but it reminded itself of the overriding objective now expressed in Regulation 10, for conducting proceedings justly and saving expense and found, correctly in our view, that:
24	“litigants should be discouraged from taking up Tribunal time and resources and putting other parties to expense by pursuing cases of no merit and partly as a negotiating tactic, and particularly in the face of a generous “nuisance value” settlement offer.”

29	The Tribunal allowed time to consider the cost schedule which had been produced by the Respondent.  It expressly allowed the parties to consider this matter between them.  The Tribunal then went on to say this:

26	“Whilst adjourned, however, the parties came to a binding agreement through their representatives as to the specified sum which they then asked the Tribunal to order, namely £3,000.  Having exhaustively confirmed that this indeed is the position of them both, we must so order.”

That on its face is an express indication that the Tribunal was acting upon the written decision of the parties.

30	Today it has been contended that there was no agreement and that the Tribunal erred in failing to accede to an application by Mr Carr to adjourn the proceedings to the following day.  We asked what he would have accomplished, given that his attack on the schedule of costs is limited essentially to challenging the number of hours charged by an in-house barrister of the County Council.

31	We cannot fault the Tribunal in wishing to conclude the matter that day.  We find it impossible to accept that it was operating on the basis that the Applicant had not agreed to the numerical figure of £3,000 offered by the Respondent and that he was seeking a further adjournment.

32	The words used by the Tribunal indicate that at least initially there may have been some doubt which caused the Tribunal to examine exhaustively whether there had indeed been an agreement.  Nevertheless, lest this remain a difficulty for the Applicant in his acceptance of what occurred that day, we have ourselves examined the costs schedule.

33	Mr Carr submitted that certain aspects relating to the payment of supply teachers to substitute for the absent teacher witnesses could not be held to be an allowable cost.  These amounted to £640 out of a claim for £4,655 made up of 63 hours of in-house lawyer charge and £850 Council fee.

34	Mr Carr very fairly accepted that he would not be able to challenge the hourly rate of fee-charging at £55 but might have made some headway on the number of hours since he considered this case did not justify that amount. He could not challenge Counsel’s fees.  We are satisfied that the Tribunal has recorded an agreement, since why else would the Respondent disclose its offer effectively to settle for 60% of its costs, unless it was subject to an agreement?

35	The essential grievance of the Applicant is that the Tribunal has bolted together in its award of costs a number of the heads specified in Rule 14.  We can see that there is some force in the finding that the Tribunal has not given full reasons for its decision that the Applicant acted vexatiously and abusively.  True it is that pursuing Employment Tribunal proceedings for an ulterior purpose would be an abuse but we think that if the Tribunal had genuinely intended to visit his conduct as vexatious and abusive it would have made it clear it was so doing.

36	However, it did make lucidly clear that it was finding against the Applicant on the grounds that he had acted unreasonably and that his claim was misconceived.  Those are two of the heads. It appears to us that once a Respondent succeeds before an Employment Tribunal, under any one of the five headings within Rule 14, then the Tribunal is under a duty to consider an award of costs.

37	The unfairness which the Applicant contends existed here is based upon the allegation that the Tribunal failed to order a pre-hearing review.  In other words, since the Tribunal came to the conclusion, after hearing his evidence, that he had a weak case, and since an earlier decision by an Employment Tribunal had indicated further particulars should be provided, the Tribunal, of its own motion, should have ordered a pre-hearing review pursuant to Rule 7.  Indeed Mr Carr says it was an error for it not so to do.

38	We reject that contention.  A party or the Tribunal may order a pre-hearing review but it is odd, we think, for an Applicant to complain that a pre-hearing review was not ordered in his or her case.  In any event, there is no duty on an Employment Tribunal to instigate the procedure and therefore there is no substance in that complaint.

39	The same is true of the complaint that the Tribunal ought to have struck out the Applicant’s proceeding, presumably under Rule 15.  Again we make the same comment.

40	It was further submitted that this case is informed by the judgment in the Court of Appeal in Gee v Shell UK Ltd [2002] EWCA CIV 1479.

41	It is clear that the approach of an Employment Tribunal under the 2001 Rules is different from that under the 1993 Rules. As Scott Baker LJ put it (see paragraph 22), the new Regulations lower the threshold for the award of costs and allow for the Tribunal itself to make an award of costs of up to £10,000, whereas previously it was kept at £500, subject in each case to the power of the Tribunal to order detailed assessment.

42	In our judgment, the facts in Gee are markedly different.  In that case the Applicant was persuaded to withdraw her case before the Tribunal when she was acting in person and the Respondent had the considerable advantage to be represented by Mr Andrew Hochhauser QC.  The conclusion of Scott Baker LJ was that the Tribunal exerted unfair pressure and this caused her with withdraw her claim.  He held that she had an arguable case on the points which she was raising.

43	Mr Carr told us that in his experience since the advent of this new rule routinely Respondents to Originating Applications draw attention to this change.  As he put it, it is an abuse by such Respondents to threaten clients of his voluntary sector body with an award of costs if they failed.  We would deprecate such a routine approach by Respondents to proceedings and make it clear that it is still only in an exceptional case that costs are awarded under Rule 14 of the 2001 Rules.

44	There are other avenues for criticising cases which are very weak, such as the pre-hearing review and applications to strike out.  But it is open to a Tribunal, in any case, irrespective of whether there has been a pre-hearing review or an application to strike out, to make an award of costs.

45	We do not find that there was oppressive conduct by the Respondent here or that such conduct influenced the Employment Tribunal in making the costs order which it did.  We would not be in a position to disagree with the approach of the Employment Tribunal, given as we have indicated that the Tribunal found that there had been agreement on the arithmetic.

46	In these circumstances the appeal is dismissed.