Appeal No. EAT/1468/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 30 April 2002

Before
MR RECORDER LANGSTAFF QC
MR P DAWSON OBE
PROFESSOR P D WICKENS OBE

MR S MORGAN	APPELLANT

REGAL HOTELS PLC	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MISS R TUCK
(Of Counsel)
Instructed by:
Messrs Gamble Morris Hills
Solicitors
1884 Pershore Road
Kings Norton
Birmingham
B30 3AS	

MR RECORDER LANGSTAFF QC

1.	This appeal comes to us by way of Preliminary Hearing from an Employment Tribunal sitting at Birmingham.  On 16 October 2001 in extended reasons then given the Tribunal dismissed the Appellant’s complaint of unfair dismissal and breach of contract and ordered him to pay costs.  The jurisdiction to pay costs was then some one day old in its present form under rule 14 of the Rules contained in the Employment Tribunals Constitution and Rules of Procedure Regulations 2001.  That rule provides as follows:

“Where in the opinion of the Tribunal a party has in bringing the proceedings or a party or party representative has in conducting the proceedings acted vexatiously, abusively, disruptively or otherwise unreasonably or the bringing or conducting of the proceedings by a party has been misconceived, the Tribunal shall consider making and if it so decides may make an order containing an award against that party in respect of the costs incurred by another party.”

2.	There are under that rule two separate sets of grounds for paying costs.  Unreasonable conduct coupled with that which is vexatious, abusive and disruptive is one.  The bringing or conducting of proceedings which are misconceived is a second.  There is a two stage process for the Tribunal.  It must first consider at least making an award but it does not have to.  The second stage is to decide whether it will.
 
3.	The purpose of the rule is beyond argument as intending to provide some measure of financial compensation where the party behaves in a manner described.  In the present case the only appeal is in respect to the order in relation to costs.  Mr Morgan was dismissed for gross misconduct on the grounds that he was asleep on duty.  Sleeping on duty was categorised as gross misconduct in the disciplinary procedures applicable to him.  At a disciplinary hearing his employers alleged that he had first denied but then accepted that he had been asleep on duty.  He was therefore dismissed.  The Appellant applied to the Employment Tribunal.  In his originating application he denied that he had been asleep on the relevant occasion.  In the conclusion in respect of costs the Employment Tribunal continued in these words:

“He maintained and continued that denial until the day of the hearing, when he amended his written statement of evidence by deleting the denial.  He then voluntarily admitted that he had been asleep.  Had he made that admission at the commencement of the proceedings, it would have been apparent to all those concerned in the proceedings that, even if he succeeded in establishing that his dismissal was unfair, any award that would have or might otherwise been made, would be very substantially reduced or (more probably) extinguished entirely by reason of his dismissal.  The withholding of that opportunity for evaluation of the financial implications of the proceedings, meant that substantial legal and other costs were incurred on the wrong premise.”

4.	The Tribunal had identified the bringing and conducting of the proceedings as misconceived and the actions of the Applicant as being unreasonable thereby bringing their decision in respect of costs under both heads for the reasons I have just cited.

5.	We are only at liberty on appeal to interfere with a decision which is within the discretion of a Tribunal if it can be shown that the Tribunal was in error of law in that it exercised its discretion upon some wrong principle of law or that it took into account some matter which it should not have taken into account or alternatively failed to take into account that which it should have taken into account.  

6.	Here Miss Tuck who appears for the Appellant says the Tribunal was in error because it took into account a form of cost benefit analysis.  It is no part of a decision in respect of rule 14 costs that the Tribunal should consider whether or not there was an opportunity for evaluation of the financial implications of the proceedings.  It is, she says, taking into account something which is inappropriate.

7.	We regret that we cannot accept Miss Tuck’s submissions nor do we think that they are reasonably arguable.  We consider that looked at fairly and bearing in mind that this is a decision of an Employment Tribunal and therefore a reasonable amount of latitude can be given for the manner of expression of the reasoning that what the Tribunal was dealing with in paragraph 26(i) was two things.  First, it was concluding that the proceedings were misconceived, that they had no reasonable prospect of success or alternatively, the bringing of them was and the conducting of them was unreasonable because central to the issues was whether or not the Appellant was asleep.  He had denied it but in fact his denial was deceitful.

8.	That we think that certainly was capable of being unreasonable.  It would only have been misconceived if there was no prospect of any procedural argument succeeding.  Very little by way of procedural argument was identified.  We consider that the second issue that the Tribunal has rolled up in that paragraph is consideration of whether or not, given that the behaviour was unreasonable or the conduct of the proceedings misconceived, the Tribunal should in fact exercise its discretion to award costs.  Since the purpose of rule 14 is to avoid or ameliorate the costs of such proceedings where they are indeed unnecessary, unreasonably brought and misconceived we consider that the actual costs incurred are never far away from the exercise of the discretion by the Tribunal.  Although they do not necessarily have to be taken into account we see no reason why they should not be and we think that it is unarguable that a Tribunal may not pay regard to them.

9.	It follows that we see no arguable basis to falsify the exercise of its discretion by the Tribunal in this case, harsh though the financial consequences may be upon Mr Morgan.  For those reasons this appeal must be dismissed.