Adecco (UK) Ltd v Aldwinkle

An employment tribunal must actively consider making a costs order where a party has acted unreasonably, but the discretion remains judicial and fact-sensitive. The tribunal must consider the whole picture, including the conduct identified, why it was unreasonable and its effects. Ability to pay is a relevant consideration, but the tribunal has no absolute duty to obtain or determine it before making an order. A party’s non-attendance may itself be relevant, particularly where that party has failed to provide evidence of means. Conduct in bringing a claim may be reasonable even though later conduct in prosecuting it is unreasonable. A tribunal errs in law if it considers only the reasonableness of bringing the claim and ignores persistent non-compliance and non-participation in the proceedings.

Adecco appealed against an Employment Judge’s refusal to order costs after Mr Aldwinkle’s employment claim was struck out for non-compliance with case management directions. His solicitors had ceased acting, he failed to respond to tribunal and respondent correspondence, did not comply with orders, and did not attend the hearing. He was debarred from participating in the appeal.

The central issue was whether the Employment Judge had erred in refusing costs because Mr Aldwinkle’s means were unknown and because the question of employer identity could make the claim reasonable when brought.

1. The appeal was allowed. The Employment Judge had erred in law by failing to consider the claimant’s persistent failure to prosecute and conduct the proceedings reasonably.
2. Under Employment Tribunal Rules 2004, Schedule 1, rule 40, the tribunal must consider making a costs order where the paying party or representative has acted vexatiously, abusively, disruptively or otherwise unreasonably, or where the proceedings were misconceived. The discretion to make an order remains broad.
3. The approach in McPherson v BNP Paribas (London Branch) [2004] IRLR 558 confirms that appellate intervention is justified where discretion is exercised contrary to principle, without regard to relevant considerations, or plainly wrongly.
4. Following Yerrakalva v Barnsley Metropolitan Borough Council [2012] 2 All ER 214, the tribunal must look at the whole picture, identify the unreasonable conduct, explain why it was unreasonable, and consider its effects.
5. Ability to pay is relevant but is not an absolute prerequisite to a costs order. Jilly v Birmingham and Solihull Mental Health NHS Trust & Others UKEAT/0584/06/DA; UKEAT/0155/07/DA and Mirikwe v Wilson & Co Solicitors and others UKEAT/0025/11/RN recognise that non-attendance may justify giving little or no weight to the absence of evidence about means.
6. The Employment Judge had addressed the reasonableness of bringing the claim but failed to address the separate question of unreasonable conduct in conducting it. The EAT therefore substituted its own discretion and ordered Mr Aldwinkle to pay Adecco £375, being the counsel’s fee claimed, excluding VAT.

• Employment Appeal Tribunal: allowed Adecco’s appeal against the refusal of costs and substituted a costs order of £375.
• Employment Tribunal: struck out the claim for non-compliance with case management directions but refused costs.