Growcott v Glaze Auto Parts Ltd

An Employment Tribunal’s decision to award costs for unreasonable conduct is primarily a factual and discretionary decision. An appellate tribunal should intervene where the reasoning is defective or inadequate, but not merely because the unsuccessful party disputes the merits decision.

When determining costs, the Tribunal must proceed from its earlier findings unless that decision has been successfully appealed. It may find that a claimant acted unreasonably by continuing proceedings after receiving a clear and accurate warning explaining the applicable legal test, the weaknesses in the claim and the potential costs consequences.

The claimant was dismissed for misconduct after her employer concluded that she had used foul and abusive language towards employees of a customer. Her unfair dismissal claim failed before the Employment Tribunal, and her appeal against that decision was dismissed at an oral hearing following a sift decision.

The employer then applied for costs under rule 38 of the Employment Tribunal Rules. The Tribunal rejected the contention that the claim had been misconceived from the outset, but found that the claimant had acted unreasonably in continuing it after receiving a solicitor’s email explaining the Burchell principles and warning of a possible costs application. It ordered her to pay £1,972.50. The central issue was whether that costs decision disclosed an error of law or perversity.

1. Appeal dismissed. The Employment Tribunal was entitled to order the claimant to pay costs incurred after 14 June 2010.
2. A decision whether a litigant acted unreasonably for costs purposes is a decision of fact and discretion for the Employment Tribunal. The appellate task is limited. Intervention is justified where the reasoning is defective or inadequate, but the claimant had not shown perversity or an error of law.
3. The costs Tribunal had to take its earlier unfair dismissal findings as its point of departure. It could not reconsider those findings or treat the costs hearing as an opportunity to decide that the merits decision had been wrong. The claimant’s renewed criticisms of the investigation and the evidence therefore had no material weight.
4. The relevant unfair dismissal question was whether the employer had conducted a reasonable investigation, genuinely believed in the misconduct and acted within the range of reasonable responses. The Tribunal did not have to determine whether the claimant had in fact used the offensive language. Her denial was consequently of no significant relevance to whether she acted unreasonably after receiving the warning email.
5. The email accurately and plainly explained the applicable approach, identified the weaknesses in the claim and warned of the risk of costs. The Tribunal was entitled to find that continuing the proceedings despite that warning was unreasonable.
6. An alleged factual error concerning the claimant’s denial did not vitiate the alternative costs finding. The Tribunal was also entitled to find that she had not herself obtained statements from the customer’s employees; that finding was not shown to be perverse.

• Employment Tribunal, Birmingham: the unfair dismissal claim was dismissed. On a later costs application, the Tribunal ordered payment of £1,972.50 for unreasonable pursuit of the claim after 14 June 2010.
• Employment Appeal Tribunal: the claimant’s appeal against the merits decision was dismissed at an oral hearing after a sift decision that it had no reasonable prospects of success.
• Employment Appeal Tribunal: the appeal against the costs order was dismissed.